Journal of Market Focused Management, 2, 213–232 (1998)

°
c 1998 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands.

Measuring Market Orientation: Generalization and

Synthesis
ROHIT DESHPANDÉ*
Professor of Business Administration, Harvard Business School and Executive Director, Marketing Science
Institute

JOHN U. FARLEY
C. V. Starr Distinguished Research Fellow, Amos Tuck School, Dartmouth College and Henkel Professor of
Industrial Marketing at the China-Europe International Business School, Shanghai

Received June 16, 1997; Revised September 8, 1997; Accepted September 9, 1997

Abstract

This paper reports on an integrative, cross-national study which synthesizes and retests work
of three separate groups of researchers who in the late 1980’s developed measurements
of a firm’s Market Orientation. The projects resulted in three different but syntactically
similar Market Orientation scales which, along with other measures, were used to support
substantive conclusions, particularly those involving firm Performance. Based on a new
study of 82 managers in 27 European and U.S. companies, we show that all three scales are
reliable and valid. The scales also seem to generalize well internationally, both in terms of
reliability and prediction of Performance. We also show that the scales are similar to one
another in terms of various validity measures and in terms of correlations with Performance
measures. Finally, we synthesize a 10-item scale based on a more parsimonious definition
of Market Orientation as: “the set of cross-functional processes and activities directed at
creating and satisfying customers through continuous needs-assessment.”
Keywords: market orientation, international marketing, measurement

Market Orientation is a central component of the more general notion of the Marketing
Concept, the pillar upon which the modern study of marketing is based. Because of its
significant managerial relevance, measuring Market Orientation has for the past five years
been assigned top priority status in terms of research needs by the Marketing Science
Institute (MSI). This paper deals with generalizing knowledge about Market Orientation
in two ways: (1) through analysis of three alternative methods of measurement and of
* The authors are deeply indebted to Paul Root, President of the Marketing Science Institute and the 82 executives
from 27 MSI-member companies who participated in this study, and to Donald Lehmann who was Executive
Director of MSI at the inception of this project. We are also very grateful to Bernie Jaworski, Ajay Kohli, John
Narver and Stan Slater for providing us with scale data materials and advice on research design, and to Scott
Neslin and Julien Levy for their comments on a draft of this paper. All errors are, of course, ours.
214 DESHPANDÉ, FARLEY

conclusions reached using these methods; and (2) through assessment of the robustness of
measurement results across countries and industries.
Our work is in the spirit of a clear and encouraging movement afoot in marketing to
attempt to draw generalizations from existing bodies of work. The impetus for this comes
from a number of sources, not the least of which is managers’ impatience with specialized
and frequently arcane research that does not seem broadly applicable. Examples of work in
the direction of such synthesis include a special issue of Marketing Science (1995) dealing
with empirical generalizations in marketing, and a similar issue of Management Science
(1994) dealing with cross-national generalizations of management science applications,
including several in the marketing area. The specific need for better integration of work in
Market Orientation is further supported by an editorial in this journal noting the multiplicity
of terminology which characterizes the field: “Lack of standardization of operationalization
of constructs hampers the progress of any discipline. It is time we agreed upon terms and
their conceptualizations.” (Grover, 1996: 115). This is a theme echoed in two papers in
the same issue of JMFM by Jaworski and Kohli (1996) and Slater and Narver (1996).
The work reported here is also in the spirit of meta-analysis which has offered a useful
approach to generalizing about advertising (Assmus, Farley and Lehmann, 1984) and price
elasticities (Tellis, 1988), diffusion models (Sultan, Farley, and Lehmann, 1990, 1996)
and buyer behavior models (Farley, Lehmann, and Ryan, 1982a,b). Farley, Lehmann, and
Sawyer (1995) attempt to generalize further on a set of underlying meta-analysis. One
conclusion that has emerged from this stream of work is that it would be useful to attempt
to make partial generalizations early in the development of a field that appears to have
the potential to generate a large volume of research in a fairly short time period. Such
“prospective” meta-analyses may help shape the field by directing researchers’ attention
toward options that really add knowledge and away from options that essentially repeat
known and reliable results. The measurement of Market Orientation is a topic with such
potential; it has received considerable research interest in the past decade and, prompted
by its managerial relevance, has had and will probably continue to have, priority status at
the Marketing Science Institute (Deshpandé and Farley, 1996).

Empirical Measurement of Market Orientation

In the late 1980’s, more or less without specific knowledge of each others’ work, three
sets of researchers developed measurements of Market Orientation as elements of broader
studies with somewhat different objectives:

• Narver and Slater developed a 15-item factor-weighted scale, which they used as one
of 9 different measures in explaining ROI. The other factors included buyer and seller
power, concentration and ease of entry, market growth, technological change, and firm
size and growth. The scale was tested, along with the other measurements, on split
samples from 371 self-administered questionnaires from top managers of 140 SBUs of
a single corporation. Their results, reported in the Journal of Marketing (1990), found
differential effects (positive and significant) of market orientation for commodity and
non-commodity businesses.