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Ramos, martins barandas (2011) a confrontation...

  1. 1. A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. Paulo Ramos (UFP) F. Vitorino Martins & Hortênsia Barandas (FEP-UP) KEY WORDS: market orientation, perceived market orientation, buyer-seller relationships, Wine.
  2. 2. <ul><li>1. INTRODUCTION </li></ul><ul><li>2.LITERACTURE REVIEW </li></ul><ul><li>3. HIPOTESIS </li></ul><ul><li>4. METODOLOGY </li></ul><ul><li>5. RESULTS </li></ul><ul><li>6. CONCLUSIONS </li></ul>STRUCTURE: A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES.
  3. 3. <ul><li>Introduction: </li></ul><ul><li>Main gaps in the literature: </li></ul><ul><li>The study of the nonfinancial consequences of market orientation (MO) is still scarce (ie. Frasquet et al ., 2008). </li></ul><ul><li>Only few researches have empirically cross-analysed the concept of MO and Relationship Marketing (RM) (i.e. Siguaw et al ., 1998; 2002; Steinman et al ., 2000; Langerak, 2001). </li></ul><ul><li>Most studies measured the effect of MO only as a one dimensional construct against indications of the contrary ( Blesa and Bigné, 2005). </li></ul><ul><li>There is also no consensus about the different MO streams (behavioural and cultural), that need to be more fully integrated (Kirca et al ., 2005). </li></ul><ul><li>Measuring MO is also measuring the relationship between the several stakeholders that constitute the market (Greenley et al ., 2005). </li></ul>A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES.
  4. 4. <ul><li>Introduction: </li></ul><ul><li>Aim : to determine the impact of the different MO dimensions on business relationships and the moderating role of perceived market orientation (PMO) between them on both sides of the channel partnership. </li></ul><ul><li>It contributes to the existing literature by: </li></ul><ul><li>Analysing the contribution of the different MO dimensions on business relationships on both sides of the channel; </li></ul><ul><li>Integrating both behavioural and cultural dimensions in the analysis; </li></ul><ul><li>Analysing the role of PMO on both sides of the channel relationship; </li></ul><ul><li>Describing and comparing the effect that the self reported MO exerts in the PMO of both partners; </li></ul><ul><li>Comparing the effects of self-reported MO and PMO on business relationships. </li></ul>A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES.
  5. 5. A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. Market orientation has been defined as: “ Organizational culture that effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers, and, thus, continuous superior performance for the business” (Narver and Slater, 1990, p. 21). “ A set of activities or behaviours relating to market intelligence gathering, market intelligence dissemination cross functionally within a firm, and the actions responses based on this intelligence (Despandé, 1999, p. 3). - The concept appears divided between a cultural based and an activity based approach.
  6. 6. A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. Market orientation main schools and dimensions
  7. 7. A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. MO and Relationship Marketing: <ul><li>MO is the implementation of the marketing concept (Kohli and Jaworski, 1990; Elg, 2007; Foley and Fahy, 2009) and sustained as the ultimate evolutionary degree in business philosophies (Kotler & Keller, 2006; Hedaa and Ritter, 2005). </li></ul><ul><li>Relationship Marketing (RM) presents itself as a new way to understand marketing’s actual trends (Sheth & Parvatiyar, 1995). </li></ul><ul><li>The core of MO is also the successful establishment of strong relationships between buyers and sellers (Steinman et al ., 2000). </li></ul><ul><li>There are evidences of a positive relationship between MO and some of its dimensions and RM (i.e. Siguaw et al. 1998; Baker et al. 1999; Steinman et al. 2000; Sanzo’s et al. 2003; Blesa and Bigné, 2005). </li></ul>
  8. 8. A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. Preposition 1 : The more market oriented the partners are, the better their relationships with each others (Baker et al ., 1998; Siguaw, 1999). H1 (a,b,c,d). Preposition 2: The perception of the partners’ MO is influenced by their own level of MO (the intermediary acts like a reference group to the producers, thus influencing their choice of intermediaries, Siguaw, 1999). H2 (a,b,c,d). Preposition3: Both producers and intermediaries tend to seek a business partner that share the same type of market orientation (Coulter and Coulter, 2003) and that has an impact over their relationships. H3. Preposition and Hypotheses
  9. 9. Conceptual model of the research hypotheses A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES.
  10. 10. Methodology A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. January - July 2009 Date of field work Convenience sample. Producers: 201 total replies but only 137 were validated. Intermediaries: 103 total replies but only 76 were validated. Sampling procedure E-mail structured, personal, with a link to an on-line survey sent by the main wine producers’ representatives to their e-mail databases. The intermediaries’ survey used e-mail with databases from trade associations, wine events and personal in home survey. Data collection method 137 Producers and 76 Intermediaries valid questionnaires (after the missing values and outlier identification). Sample size Portugal Geographical scope Portuguese wine producers and wine intermediaries (distributors, specialist retailers, wine bars, restaurants, agents). Universe
  11. 11. Procedure adopted for the scale development A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. The scale validity was tested using the criteria of content and construct (Convergence) validity (Churchill and Iacobucci, 2005; Malhotra, 2004). Assessing validity. Step 5 The data collection was tested for its reliability and dimensionality (EFA). The proposed scales were all statistically reliable according to the Cronbach α and presented a high α. Collecting final data. Evaluating scale reliability. Step 4 An adapted scale was developed and pre-tested (alpha and EFA). Collecting initial data and assessing its reliability and validity. Step 3 The initial pool of items was generated and pre-tested qualitatively. Some items were dropped and some new were suggested. Generating the items and designing the scale. Step 2 A literature review was conducted in order to check for conceptual models and to establish the key dimensions and variables to include in the scale. Defining the construct and identifying the dimensions. Step 1
  12. 12. A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. <ul><li>Data analysis methodology </li></ul><ul><li>Partial Least Squares (PLS) structural equation method is used to measure the relationships and paths between the main constructs or dimensions. </li></ul><ul><li>This method allows using less demanding structural equations with lower sample sizes and non-normal distributed data (Fornell and Bookstein, 1982; Lohmoller, 1989; Tenenhaus et al ., 2005). </li></ul><ul><li>It is also particularly adequate for the assessment of formative models such as the one used in this research (Albers, 2010). </li></ul><ul><li>The hypotheses test used the bootstrap method to evaluate the t statistics associated with the significance levels, and the PLS path analysis provided the path coefficients and the R2’s. </li></ul>
  13. 13. Results: Variance Extracted, Composite Reliability and Cronbach Alpha A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. 0.925 0.942 0.732 REL 0.931 0.948 0.784 PMO 0.616 0.742 0.378 RES 0.781 0.836 0.506 IG 0.826 0.873 0.536 ID 0.743 0.817 0.406 CUST INTERMEDIARIES 0.903 0.926 0.676 REL 0.823 0.876 0.586 PMO 0.851 0.893 0.626 RES 0.833 0.881 0.599 IG 0.837 0.880 0.552 ID 0.800 0.855 0.461 CUST Cronbach Alpha Composite Reliability AVE   PRODUCERS
  14. 14. Results: Bootstrap model T-statistic. path coefficients and R2 A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. *** significant at the 0.001 level. * significant at the 0.05 level. 0.423 0.283 0.365 0.334 R 2 0.317   0.501   PMO 0.195 0.201 0.331 0.101 RES -0.109 0.019 -0.070 -0.059 IG 0.056 0.286 -0.061 0.395 ID 0.341 0.136 -0.065 0.201 CUST path coefficients 2.711*** 5.443***   PMO 0.766 1.394 2.002*** 0.705 RES 1.113 0.294 0.612 0.565 IG 0.774 1.946* 0.505 3.525*** ID 3.001 1.040 0.563 1.692 CUST REL PMO REL PMO Bootstrap Model T-Statistic Intermediaries Producers
  15. 15. Results: A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES.
  16. 16. Results: A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES.
  17. 17. Results: moderation effect of PMO and Hypotheses confirmation A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. .170 .244 Moderating value .325 .210 model R 2 without PMO .423 .365 Model R 2 with moderator Intermediaries Producers yes yes H3b yes yes H3a no no H2a no no H2d no no H2c yes yes H2b no no H2a yes no H1d no yes H1c no no H1b no no H1a Intermediaries Producers
  18. 18. Conclusions A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. <ul><li>This study provides empirical evidence that MO has a positive impact on business relationships and on the soundness of analysing each MO dimension separately, as they have different impacts on business relationships and on the PMO. </li></ul><ul><li>Producers: only responsiveness was confirmed to have a significant impact on the business relationship: only the visible actions undertaken by the producers seems to have a positive impact on business relationships rather than information sharing about the target consumers. </li></ul><ul><li>Intermediaries: the single dimension with a direct positive relation with business relationships is cultural customer orientation: it is their own belief in being market oriented that influences their relationships more than their market orientated activities. </li></ul>
  19. 19. Conclusions A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. <ul><li>The ID activities have a positive effect on the perception of each other’s MO. </li></ul><ul><li>The producers PMO relates more strongly with their business relationships than the MO dimensions, but that does not happen for the intermediaries. This confirms Baker et al . (1999): the supplier’s perception of a reseller has a positive effect on their business relationships, attributing greater expertise to the intermediary. </li></ul><ul><li>It also partially confirms Coulter and Coulter’s (2003) statement that producers and intermediaries seek business partners that share similar views of market orientation. </li></ul><ul><li>The findings suggest that producers and intermediaries over appreciate their own concept of MO without still implementing the necessary activities to actually become more market oriented. </li></ul>
  20. 20. Conclusions A CONFRONTATION OF THE IMPACT OF THE MARKET ORIENTATION DIMENSIONS ON BUSINESS RELATIONSHIPS BETWEEN WINE PRODUCERS AND INTERMEDIARIES. <ul><li>The fact that PMO acts as a moderation variable between MO and REL suggests that the PMO measurement should not be used as a surrogate to the measurement of the self reported MO. </li></ul><ul><li>The results suggests that producers and intermediaries do not have the necessary and organized systems of information gathering and dissemination requested to be fully market orientated. </li></ul><ul><li>Both wine producers and intermediaries may still be in an embryonic stage of MO. They tend to overemphasize the MO cultural aspects, but don’t fully implement most of the MO activities, namely the necessary and organized systems of information gathering and flow. </li></ul><ul><li>Both tend to rely more on perceptions and intuitions of their business partners that they tend to perceive as being market oriented. </li></ul>

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