The Relationship Among Internal Customer Orientation, Market Orientation And Business Performance In Service Sector

Marketing concept is a cornerstone of the marketing discipline; it's a business philosophy, an ideal or a policy statement. Kohli and Jaworski (1990) use the term "market orientation" to mean the implementation of the marketing concept. After more than 10 years of developing, this study covers the construct of market orientation, its measurement, and its relationship with business performance etc .A steady steam of empirical studies has focused on this topic, and has got a relative consistent conclusion, that is, market orientation has a positive effect on business performance. But in the context of services marketing, this exclusive external focus of market orientation is increasingly being challenged (Gummesson, 1994, 1998). Although evidence does exist to suggest that an external market orientation improves performance in the context of service suppliers (Naidu and Narayana, 1991; Chang and Chen, 1998; Vorhies et al., 1999), there are increasing calls for research to examine the impact of internal orientations on business performance (Gummesson, 1994, 1998; Greenley and Foxall, 1996, 1998; Berman et al., 1999).Therefore, scholars researched the construct and measurement of internal customer orientation, some of them discuss the relationship between internal customer orientation and business performance. However, these studies have focused primarily on Europe and the United States. There is little research based on the Chinese economic situation, therefore, little empirical research has focused on the Chinese service sector.Based on the literature review and actual observations, we propose the necessary to study the relationship among internal customer orientation, market orientation and business performance in service sector, and then we constructed the conceptual model for them. The following hypotheses are presented and tested: internal customer orientation has a direct positive impact on market orientation; market orientation has a direct positive impact on business performance; internal customer orientation has a direct positive impact on business performance. In order to test those hypotheses, our study takes the companies in service sector of Changchun as the research objective; we get 142 samples through convenience samples. The test of reliability and validity for all scales that we used, show that all scales have certain reliability and validity, they could the valid measures for internal customer orientation, market orientation and business performance. The descriptive analysis showed that the sample has a good representation for the population, and the distribution of the sample is similar to normal distribution, it is suitable for the structure relationship test. The AMOS software was used for analysis.The main conclusions of this study include:First, both levels of market orientation and internal customer orientation are low, the mean test for the levels of market orientation and internal customer orientation in service sector show that both levels are relative low; they have a large for improvement.Second, internal customer orientation has a direct positive impact on market orientation. this conclusion indicate internal customer orientation can be as an antecedent of market orientation, the improvement of internal customer orientation will lead to the improvement of internal customer orientation.Third, market orientation didn't have a direct impact on business performance, that is, while the level of market orientation in the service company is high, its business performance may not very good. These conclusions indicate market orientation may need other ways to influence the business performance.Forth, internal customer orientation has a direct positive impact on business performance. Through the test for hypothese3, we find that internal customer orientation has a direct positive impact on business performance; it means that if the service company has a higher market orientation, their business performance will be better. This conclusion gives a direction for service companies to improve their business performance.Finally, this article proposed some suggestions for future research:Firstly, the mechanism of how market orientation influences the business performance. Our conclusion suggests that market orientation didn't have direct impact on business performance in service companies, market orientation may be need other ways to influence the business performance. So this issue needs a further more research.Second, research the market orientation in service sector of the southern part of China. There are lots of differences between south and north in economic level, local culture and the level of development in service sector, but our research can just represent the cities in northern part of China. So it's valuable to research this issue in south of China.Third, redefine the construct of market orientation. After more than 10 years of developing, this study covers the construct of market orientation, its measurement, and its relationship with business performance etc .at present, both the construct of market orientation and its measurement are based on the traditional marketing concept, mainly focus on the customers. But the American Marketing Association has created a new definition of marketing in 2004, this definition reflects the development trend of marketing concept in today. Market orientation is the implementation of the marketing concept, it should adapt to the development and change of marketing concept.it is necessary to redefine the construct of market orientation, and develop an appropriate measure for it.Forth, develop a better measure of market orientation in China. Although we can use the scale of market orientation that developed in another country, but several researchers find that because the difference in country, market environment, culture and development in economic, the application of market orientation theories are different(Gray; Matear; Boshoff and Matheson, 1998; Conduit and Mavondo, 2001).So we should develop a better measure of market orientation in China, it will help us to understand and interpret market orientation for Chinese company better.