Effect of Market Orientation on Performance of Toyota Ghana Company Limited

Background to the Study

There is a growing interest in the concept of market orientation, as empirical evidence shows that companies with higher market orientation obtain better economic and commercial results. Researchers have extensively collected evidence of the positive effect of market orientation on business performance. (Narver and Slater, 1990 USA Positive relation MO-BP). Hurley and Hult (1998) have explicitly provided a theoretical framework linking market orientation, business performance and innovation, drawing on Slater and Narver’s (1995) account of the relationship between market orientation and business performance. According to Slater and Narver (1995) market orientation only improves business performance when it is coupled with a learning orientation. They state that because of its external emphasis on developing information about customers and competitors, the market-driven business is well positioned to anticipate the developing needs of customers and to respond to them through the addition of innovative products and services. This ability gives the market-driven business an advantage in the speed and effectiveness of its response to opportunities and threats. Thus, a market orientation is inherently a learning orientation (Slater and Narver, 1995, p. 67). At present almost all the companies, irrespective of developed or developing countries, consider market orientation as a pivotal point in their decision-making process. Literature on this concept suggests that environmental factors such as technology turbulence, competition, market turbulence create the need of market orientation (Malhotra, 2001). Therefore, companies now adopt market orientation either as a culture or philosophy or behavior (Kohli and Jaworski, 1990, Narver and Slater, 1990).

Defining Market Orientation Several views of market orientation are apparent. In early 1990s Kohli and Jaworski (1990) have offered a formal definition of ‘market orientation, as a set of behavior and activities in an organization. Specifically, the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and the organization-wide responsiveness to it. In other words, it is a process of generating and disseminating market intelligence for creating superior buyer value. Narver and Slater (1990) reinforce Kohli and Jaworski’s (1990) conceptualization by defining market orientation as “the organizational culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and thus continuous superior performance for the business”. Based on this, they identified three behavioral components: customer orientation, competitor orientation, and inter functional orientation. According to Slater and Narver (1995), market orientation provides strong norms for learning from customers and competitors; it must be complemented by entrepreneurship and appropriate organizational structures and processes for high order learning. In general market orientation is concerned with the processes and activities associated with creating and satisfying customers by continually assessing their needs and wants (Uncles, 2000)

Problem Statement

There is a positive relationship between market orientation and performance as established by many researchers. (Narver and Slater, 1990 USA Positive relation MO-BP). Marketing orientation is an emerging practice adopted by many companies to improve its performance that is, their effectiveness and their innovation. (Aliyu Mukhtar Shehu and Rosli Mahmood August 2014 The Relationship between Market Orientation and Business Performance of Nigerian SMEs, Kajendra Kanagasabai 2008 Market orientation and Company Performance: A study of Selected Japanese and Sri Lankan Companies, Nora Lado 1998 Department of Business Economics, Universidad Carlos III de Madrid Spain and Albert Maydeu-Olivares 1998 Department of Psychology, University of Barcelona, Spain Exploring the link between market orientation and innovation in the European and US insurance markets). But from many searches, the research was based on marketing orientation on performance on SME’s and comparing marketing orientation on performance between two firms from two or more different countries. The researcher did not come across the link between marketing orientation and performance in the after sales operations of automobile industries. This has necessitated the need to research this topic in line with automobile industry.

Scope of the study The research will be focused on the effect of market orientation on the performance of Toyota Ghana company limited as an automobile industry. The research will be looking at how market- oriented practices adopted by Toyota Ghana impacts its performance to make it competitive in the market and ensure its survival. Scope of the study will be limited to two branches of Toyota Ghana namely: Accra and Tema. The research will be based on after sales services provided by Toyota Ghana. The research will be concentrated on Service and spare parts department.

Relevance of study

There are numerous researchers that have already been done in market orientation and its effect on performance on firms. This study will still be important in contributing enormously to practical and academic implications. This study will help after sales managers in Toyota Ghana understand the usefulness of market orientation and how it affects performance in their operations. The study will make after sales managers more proactive in anticipating and attending to customer needs and wants to improve customer satisfaction which will eventually lead to customer retention and Loyalty since there has been a growth of other competitors offering similar services at a lower price. The study will enhance after sales managers effectiveness of its response to opportunities and threats. The study will help after sales mangers review existing market-oriented practices, improve upon them and adopt new practices. If this is successfully implemented it will be shared as a best practice in other branches of Toyota Ghana, i.e., Kumasi, Tarkwa and Takoradi and Toyota Ghana Authorized Service Shops (TGASS) across the country. In the long term other automobile industries in Ghana would also try to emulate this study and incorporate it in the after sales operations.

Limitations of the study

This study will not be completed without limitations. First would be the limited time needed for the research to be completed. Also, the research will be concentrated on only one automobile firm which is Toyota Ghana therefore can not be a true reflection of all automobile industries in Ghana. Since the assessment would be conducted by a staff of Toyota Ghana who is the researcher, it would be obvious that in the study, certain degree of subjectivity could be found. It would have been sort of objective if it had been conducted by a researcher outside the company.

Structure of the study

The study would be done under five (5) main chapters. The First Chapter of the study will look at background of the study, statement of the problem, research objectives, questions the study seek out to answer, significance of the study, scope the study will be covered, limitations the study is likely to be encountered and the structure of the study. The Second Chapter will review academic studies on market orientation and performance. The Third Chapter will explain the methodology used to complete the study. Chapter Four (4) will discuss the findings of the data collected and the Final Chapter will summarize the research finding, conclusion on the study and make some recommendations.