Essay About Customer Orientation And Information Technology

Link Between Customer Orientation And
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Journal of Marketing Theory and Practice, vol. 15, no. 3 (summer 2007), pp. 187—203.
Щ 2007 M.E. Sharpe, Inc. All rights reserved.
ISSN 1069-6679 / 2007 $9.50 + 0.00.
DOI 10.2753/MTP1069-6679150301
A long-standing marketing principle is that understanding
and satisfying customers leads to superior business results.
Two firms illustrate this principle. Whirlpool discovered
certain customers wanted stylish washers and dryers, and
were willing to pay a premium for them. Consequently,
Whirlpool developed a line of high-end designer washers
and dryers. The products were so well received that they
helped generate record revenues for the firm, with customers
placing back orders on sold-out models (BusinessWeek
2004). Similarly, IBM identified a growing demand for
information technology (IT) and support services among
large as well as small businesses. In response, IBM created
and offered a portfolio of complete e-systems solutions.
Not only did the move reduce the firm’s dependence on the
hardware business but also sales of the e-systems helped
reverse its financial decline (Massey, Montoya-Weiss, and
Holcom 2001).
These and other examples suggest that attentiveness to
customers, or customer orientation, reaps large rewards. Curiously,
however, empirical support is very mixed. Studies
show that customer orientation has positive, neutral, and
even negative ties with profitability, sales growth, customer
retention, and other indicators of business performance
(e.g., Appiah-Adu and Singh 1998; Balakrishnan 1996; Voss
and Voss 2000). Given the popular appeal of customer orientation,
but lack of consistent evidence of its performance
benefits, we reexamine the customer orientation—business
performance relationship. The purpose of our study is to
better understand the existence and nature of this relationship.
For the sake of clarity, customer orientation refers to
the firm-level ability to “identify, analyze, understand, and
answer user needs” (Gatignon and Xuereb 1997, p. 78). As
elaborated later, this orientation is distinct from market
orientation, and its conditions and consequences are likewise
unique (Rindfleisch and Moorman 2003; Slater and
Narver 1998, 1999).
Our study is guided by two observations from the extant
literature. The first observation is that past studies isolating
customer orientation have examined its highly varied
and specific performance outcomes, such as subscription
theater ticket sales, number of me-too products launched,
and return on investment in small enterprises (e.g., Lukas
and Ferrell 2000; Voss and Voss 2000). Not surprisingly,
some studies have concluded that customer orientation
makes a contribution to performance, whereas others have
determined that it does not. Even though each study has
generated insight on the issue, in aggregate they present
a contradictory picture of customer orientation’s impact.
We propose studying customer orientation in relation to
business performance again, but with the latter broadly
REEXAMINING THE LINK BETWEEN CUSTOMER ORIENTATION AND
BUSINESS PERFORMANCE: THE ROLE OF INFORMATION SYSTEMS
Zhen Zhu and Cheryl Nakata
Customer orientation is said to strengthen business performance, but empirical research has not consistently
supported the claim. In this study, we reexamine the important relationship between customer orientation
and business performance. The study is based on the literature that suggests that business performance
is multidimensional (consisting of market and financial dimensions), and that customer orientation is
facilitated by information systems (consisting of information technology, or IT, capability and information
services). We determined through a survey that customer orientation contributes to business performance,
first by influencing market performance, which in turn, determines financial performance. Importantly, a
dimension of information systems—IT capability, but not information service quality—positively moderates
the impact of customer orientation. The study points to a more complex relationship between customer
orientation and business performance than previously described.
Zhen Zhu (Ph.D., University of Illinois—Chicago), Assistant
Professor of Marketing, Sawyer School of Management, Suffolk
University, Boston, MA, [email protected].