Exploring the relationship between market orientation and sales marketing collaboration

CEBR: Is it Possible to Improve the Relationship between Marketing and Sales?

exploring the relationship between market orientation and sales marketing collaboration

N. F. () Exploring the Relationship between Market Orientation and Sales and Marketing Collaboration. Journal of Personal Selling and. In marketing science a firm's market focus and market information processing is Especially from the mids onwards, many studies link market orientation to . these business units ranged from € to €4, million in annual sales revenue , with .. Project members discovered new applications while collaborating with. the relationship between market orientation and collaboration between sales of collaboration between sales and marketing has not yet been fully explored.

Taking into account that interfunctional coordination is an activity which takes place within organisation, may it not sufficient to support innovation results. Similar linkages may are needed to support firm innovation results. Our findings also revealed that the extension to which firms use different sources of knowledge for innovation is a result of a sequence of market oriented activities. Specifically, this result demonstrates that the causal relationships between MO components are important to promote firm innovation.

Overall, the results showed that the interactions between the three MO components, i. This study contributes to the understanding of how market orientation influences firm innovation by exploring a MO component-wise approach in the MO relationship with innovation initiatives.

Regarding the limitations of this research, as well future research di-rections, this study is limited to examining the relationship between MO components and innovation solely in its initial stage.

Further research in a wide-variety of countries is needed in order to reinforce our findings.

University of East Anglia - UEA

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Journal of Marketing Research, 34 1 The effect of market orientation and its components on innovation consequences: Market orientation and organisational performance: Journal of Marketing, 62 4 The impact of innovation activities on firm performance using a multi-stage model: Research Policy, 42 2 A strategy implementation perspective of market orientation.

Journal of Business Research, 57 12 Innovation, market orientation, and organisational learning: Journal of Marketing, 62 3 Market orientation, creativity, and new product performance in high-technology firms. Journal of Marketing, 68 2 Journal of Marketing, 57 3 Knowledge transfer in product development processes: Technovation, 28 Journal of Marketing, 69 2 Journal of Marketing, 54 2 Size, strategic, and market orientation effect on innovation.

An appraisal of research on the predictive power of market orientation. European Management Journal, 21 4 Knowledge capital and performance heterogeneity: International Journal of Production Economics, 76 1 The effect of market orientation on product innovation. Journal of the Academy of Marketing Science, 2 2 The estructural and environmental correlates of business strategy. Strategic Management Journal, 8 1 The effect of a market orientation on business profitability.

exploring the relationship between market orientation and sales marketing collaboration

Journal of Marketing, 54 4 Common method biases in behavioral research: A critical review of the literature and recommended remedies. Organisational innovation in SMEs: Customer-led and market oriented: It was specifically engineered for edge-lit signage applications, such as panels for airports, shopping malls, restaurants, and bus stops. It accepts light through its edges and redirects it to the surface for bright uniform illumination. This product was specifically targeted toward the edge-lit signage segment.

As the head of innovation noted: Edge-lit signage is the specific market segment that is of interest when talking about this product. Internally business developers mainly tried to quantify the market for edge lit signage by doing desk research. As the business developer put it: The marketing manager of Foam indicated: You can buy market reports on high performance foam and where that goes into. After that we had some idea of what the market really was. The market segment for edge-lit applications was developed and used in, for instance, strategy discussions before the start of the project Diffuse.

In contrast to project Diffuse, the market segments in projects Foam and Additive were developed during the initiation of the projects.

exploring the relationship between market orientation and sales marketing collaboration

Project members in these latter projects experienced the limits of their market segment frame of reference which forced them to rethink their routines. They had to label a newly identified market segment and communicate it to the rest of the organization, and they had to get familiar with this new segment before investment decisions could be made. A large part of these projects consisted of just getting familiar with market segments that were totally new to the organization.

exploring the relationship between market orientation and sales marketing collaboration

As a sales manager involved in project Foam put it: As a result, next to estimates on market segment size, also market growth rates were studied. Good examples of mapping growth rates are Green, Diffuse, and Foam. Project Green was focused on changing the feedstock and process technology of a chemical ingredient which could potentially influence the properties of the epoxy resin for which it was used. To map dynamics in market segment size, next to desk research, additional market knowledge generation practices were applied.

Product development teams complemented desk research by using potential customer contacts, and conferences and trade fairs to interact with the market. An example of using customer contacts to estimate growth rate is project Foam.

In this project, a new product was developed in order to fill a gap that resulted from an incumbent foam producer phasing out a specific foam material. As a marketing manager indicated: As was pointed out by a product manager involved in project Diffuse: This information pointed to ultra-slim edge lit displays being a trend.

Mapping the behaviour of agents such as competitors and regulators in relationship with a market segment often provided the impetus to initiate a product development project or an early indication of the feasibility of a project.

Examples of mapping the behaviour of market segment stakeholders are Heat, Green, and Anti-Resist. Project Heat clearly originated from studying developments in governmental regulations.

The need for efficient combustion engines, driven by Euro 5 and Euro 6 emission standards regulations, would result in engine designs with higher operating temperatures. At these temperatures the existing grade of plastic would melt and therefore existing customers were in need of a new type of plastic.

As the product manager involved in Heat explained: In project Green, for instance, the innovators mapped competitor behaviour by studying their patent activities from public sources.

As the business development manager involved in Green put it: Finally, in project Anti-resist, stakeholder behaviour was collected by using customer contacts and having conversations with them. As the business manager involved in Anti-resist indicated: I can show you the data that reducing rolling resistance due to stricter mandatory standards defined by the European Union is an important customer concern.

You can see that it is going on until We complemented the interview information with doing desk research. Application knowledge is knowledge on customer applications requirements in which a new product potentially can be used. It can be seen as knowledge focused on the nature of the customer application for the newly developed product. At times application knowledge can be rather technical.

Still this should be seen as market knowledge because it is about technical aspects dealt with by customers. While in some projects only one application was analyzed, in other projects employees focused on multiple applications. As a separate knowledge dimension, application knowledge has few precursors in the marketing and product development literatures.

The following examples further explicate the concept of application knowledge. After the market segment trend of increasing engine temperatures was identified in project Heat, application developers involved in the project were sent to customers to collect future heat requirements of turbo chargers and air-ducts applications which are part of vehicle engines.

As the product manager involved in project Heat explained: Further in the project the OEMs also did application tests. Results from these tests were shared with us. Project members in this project gathered information on developments in this specific application which were used in product development decisions.

In Diffuse, project members collected information on the specifics of a newly developed license plate system developed by the potential customer. As the project leader indicated: This is quite exciting because we do not disturb our current tire application.

Market segment is still tires, but it is a new application in the tire market. Application requirements for rolling resistance were hard to pin down, but in interaction with us customers shared certain expectations, which, eventually, we could meet with our new product.

exploring the relationship between market orientation and sales marketing collaboration

During the project there was constant interaction on the specifications of these applications between Foam project members and potential customers. Also in project Additive application knowledge was gathered. Project members discovered new applications while collaborating with potential buyers.

Initially, they had thought of Additive as a product to improve the flow of plastics, but testing in the market revealed that other applications were far more interesting. As the business manager explained: Our people did not know what a dispersant was or what you disperse, it was a little bit shooting in the dark.

Generating application knowledge often comes down to interactions with customers or potential customers, mainly in the development phase of the product innovation project. As the head of new business development involved in Diffuse explained: In this relationship, knowledge on the application was created. A quote from the project manager of this project illustrates how important it was to discuss application knowledge with partners that may be future customers: We selected six validation customers which was enough to discover most of the requirements of the [aircraft interior components] applications…we dealt with them with a fair amount of personal contact.

We had either partnerships, joint developments, or close relationships. On the polymer chain extension application this even resulted in a joint patent between our company and the potential customer. The third market knowledge dimension we identified is product usage knowledge table 4.

Product usage knowledge refers to knowledge on how a product is used by customers and how a product behaves in downstream manufacturing processes. For instance, if an organization has a long history of selling a specific engineering plastic it probably has developed deep knowledge on how this product behaves in downstream manufacturing processes.

Business Chemistry | Exploring market knowledge in product development of chemical firms

In contrast, if a product is under development there is a limited product history and the organization has limited product usage knowledge. It has to develop this knowledge by engaging in customer tests in the course of the product development trajectory. Product usage knowledge is distinct from application knowledge. In one product development project an organization may target applications that are familiar to the firm with a new product or technology.

In this case the organization already has significant application knowledge and limited product usage knowledge at the start of the project.

In another project, in contrast, the organization may use an existing product or technology to target unfamiliar applications. Product usage knowledge too has few precursors in the marketing and product development literatures.

The following examples further illustrate the concept of product usage knowledge. The grade development trajectory of project Heat consisted of several rounds of technical testing and dealing with issues of manufacturability. This trajectory brought the number of polymer recipes down from about 25 to two.

However, the new grade was then still not tested with customers. Although the research group wanted to do more internal tests, the product manager insisted on testing the remaining recipes with customers. These downstream partners tested the remaining recipes by using small amounts of the new product in their manufacturing processes. In project Green the organization had to build a new plant for manufacturing the new product.

From the moment the pilot plant was capable of producing a product that came close to the desired end product, project members started sending samples to customers for testing purposes. The feedback on these tests allowed project members to refine the initial product until it was ready for market introduction.

As was indicated by the business manager involved in project Green: In project Anti-resist generating product usage knowledge even led to the development of a second product which was being deployed next to the original product and is expected to become the main version of the new material.

Foam project members had discussions with a restricted set of six launching customers that all tested different grades of the new foam material during the development phase of the product development trajectory.

Discussions with these partners were quite open and after generating product usage knowledge, this knowledge was used to refine initial prototypes. As the marketing manager involved in project Foam explained: They tested initial prototypes of the material to see if it would meet their set of requirements and fed their experiences back to us…We were open to them, showing them how we developed it and the different test methods that we used.

exploring the relationship between market orientation and sales marketing collaboration

Normally they talked about plastic materials with validation partners and now they were discussing a foam product. Again the marketing manager explains: It is not an injection moulding material. We did not talk about mould temperature, conditions of raw materials or flow lines. A little bit different but the idea is the same: That was what customers really loved, they really could use that.

Practices to generate product usage knowledge were comparable with the practices identified to gather application knowledge: In project Heat, for instance, project members had interacted with customers for testing prototypes: We had a really good collaboration with them when we were testing prototypes.

We had contact with them every 1. We had our prototypes and asked them to have a look at them…. This knowledge dimension does not refer to customer needs and wants, which is predominately captured by application and product usage knowledge, but to additional useful information about customers.

Customer knowledge too has few precursors in the marketing and product development literatures. Good examples of generating and integrating customer knowledge and focusing on contact information were found in projects Anti-resist, Foam, and Additive.

Within project Anti-resist, tire manufacturers were considered as customers for the product under development. However, it appeared that these contacts did not have the knowledge to work on par with the Anti-resist team. As the business manager involved in project Anti-resist explained: These fibre people put us in contact with the materials group of their company that could better understand our new product. So we know all about them and the contacts were already there.

In project Additive, team members could not use existing customer contact information for reference purposes or for direct collaboration. Because they did not have contact information of customers in the relevant market segment, they had to search for this information. The main knowledge generation practice used for this purpose was desk research. As the business manager involved in Additive explained: Then you pinpoint the producers of these plastics and look on the internet if you can find contact information.

Also this knowledge was used in new product decision making. They had contacts at several engine part manufacturers and automotive OEMs and used these to identify decision makers at these downstream parties. Subsequently, they were able to convince these decision makers to work with them on the project. By working together with epoxy resin manufacturers, project members involved in Green found out that decision makers in the aeronautics value chain wanted more tests than decision makers at customers in other value chains before they made the decision whether or not to adopt a new product.

If the application is both new for the product developing organization and the customer, as in the case of project Diffuse, and the development organization is not sure they are pursuing a significant opportunity, information on the decision making unit can bring some assurance: His project was not really serious. He had a small laboratory and was working with students. However at a certain point in time I learned that this organization really wanted to commercialize this license plate system.

At that time we could see it as a true development project. This framework can be used for theoretical analysis as well as for practical purposes. Based on a qualitative analysis of six innovation projects we agree with a group of scholars Kusonoki et al.

Research in marketing and product development tends to see market knowledge as consisting of customer need knowledge and segment knowledge. The present study shows that this distinction ignores other important market knowledge dimensions. At least in the context of product innovation in the chemical industry four dimensions can be distinguished: Segment knowledge is market knowledge on parts of the overall market environment, involving the aspects segment size, segment growth rate, and stakeholder behaviour.

This market knowledge dimension has some precursors in the marketing and product innovation literature see e. Regarding the dimension of customer need knowledge as used in most of the marketing and product innovation literature our study suggests that it can be refined by adding the independent dimensions of application knowledge and product usage knowledge.

This refinement can directly be linked to focusing our research on the chemical industry.