The Moderating Effect of the Market Orientation Components on the Brand Orientation–Brand Performance Relationship

Abstract

The present study examines whether market orientation moderates the effect of brand orientation on brand performance. As these two orientations are argued to build on differing and even conflicting logics, the question of how they work together for the benefit of the firm is highly relevant. That is, market orientation emphasizes the importance of identifying and satisfying customer needs to the fullest (Narver and Slater 1990), whereas brand orientation highlights that the satisfaction of customer needs should only be pursued when no harm to the brand is done (Urde 1999). Importantly, we follow Sørensen (2009), who notes that the different components of market orientation may not be equally relevant for different firms and that researchers should therefore consider decomposing the market orientation concept into its components. To this end, we draw on the model by Narver and Slater (1990) and focus on the three key components of market orientation, namely customer orientation, competitor orientation, and interfunctional coordination. We hypothesize that (H₁) the effect of brand orientation on brand performance is greater at low levels of customer orientation than at high levels of customer orientation; (H₂) the effect of brand orientation on brand performance does not differ between firms at low levels of competitor orientation and at high levels of competitor orientation; (H₃) the effect of brand orientation on brand performance is greater at high levels of interfunctional coordination than at low levels of interfunctional coordination.