Market-driven hotel brands: Linking market orientation, innovation, and performance (original) (raw)
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MARKET ORIENTATION AND BUSINESS PERFORMANCE IN HOTEL INDUSTRY
World economy has gone through a rapid change in the last few decades. One of the rapid changes was the competition in almost in every industry and country. In this competitive environment, enterprises exist to gain profit. However, it is obvious that it is very hard to give one formula for profitability and better business performance. Many managers and marketing academicians has believed market orientation improve company's performance. Literature of marketing has been focused on marketing orientation and its impact to companies' performance, for more than 30 years. Lately hotel industry is also gaining more interest by the academicians. One of the reason is, hotel industry has significant influence to the economy.
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This study explores the nature of the relationship between market orientation and business performance and the mediating role of customer loyalty in this relationship. Empirical analysis was based on a sample from the Western European hotel industry. Research results indicate that market orientation has a positive direct effect on business performance and that the effects of market orientation on business performance are mediated through customer loyalty. Market orientation produces a positive effect on customer loyalty, which in turn has a positive effect on business performance, showing that market orientation has a significant and positive indirect effect on business performance. These findings suggest potential major implications for the hotel industry. For example, by developing a market-oriented organization, hotels could produce positive effects on customer loyalty and consequently on their business performance.
Market orientation, competitive advantage, and
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This study assesses how customer value affects a firm's market orientation and consequently, competitive advantage and organizational performance in a service industry-the global hotel industry. The findings show that if a firm perceives its customers as valuing service, the firm is more likely to adopt both a customer and a competitor orientation; if the firm thinks its customers are price sensitive, the firm tends to develop a competitor orientation. Moreover, the greater a firm's customer orientation, the more the firm is able to develop a competitive advantage based on innovation and market differentiation. In contrast, a competitor orientation has a negative effect on a firm's market differentiation advantage. Finally, innovation and market differentiation advantages lead to greater market performance (e.g., perceived quality, customer satisfaction) and in turn, higher financial performance (e.g., profit, market share).
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This study seeks to study the relationship between market orientation and business performance and to evaluate the mediating effect of adopting a low-price strategy in this relationship in the hotel industry. A sample from the Spanish and Portuguese hotel industry is used. Results show that the effect of market orientation on business performance is positive and direct. On the other hand, the results do not confirm the mediating effect of a strategy based on low-price in the strength of this relationship. Moreover, results indicate that a price strategy based on low-price is negatively related to hotel business performance.
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