Knowledge that Transforms

In recent years, academic and practitioner interest has focused on market orientation and factors that engender this orientation in organizations. However, much less attention has been devoted to developing a valid measure of market orientation. Here we define market orientation as the organizationwide generation of market intelligence pertaining to current and future needs of customers, dissemination of intelligence horizontally and vertically within the organization, and organization-wide action or responsiveness to market intelligence. The authors describe a procedure to develop a measure of the construct. Key features of the research methodology include several rounds of pretesting, a single-informant assessment, and a multi-informant (both marketing and nonmarketing executives) replication and extension. The multi-informant results indicate that the proposed 20-item market orientation scale (MARKOR) may be best represented by a factor structure that consists of one general market orientation factor, one factor for intelligence generation, one factor for dissemination and responsiveness, one marketing informant factor, and one nonmarketing informant factor. Taking into account the informant factors, the subsequent validation tests are moderately supportive of the market orientation construct. The authors discuss methodological, substantive, and application directions for future research in light of these findings.

Relying on a Bayesian-like framework, the authors develop a behavioral process model of perceived service quality. Perceptions of the dimensions of service quality are viewed to be a function of a customer's prior expectations of what will and what should transpire during a service encounter, as well as the customer's most recent contact with the service delivery system. These perceptions of quality dimensions form the basis for a person's overall quality perception, which in turn predicts the person's intended behaviors. The authors first test this model with data from a longitudinal laboratory experiment. Then they develop a method for estimating the model with one-time survey data, and reestimate the model using such data collected in a field study. Empirical findings from the two tests of the model indicate, among other things, that the two different types of expectations have opposing effects on perceptions of service quality and that service quality perceptions positively affect intended behaviors.

The authors propose a probabilistic approach to optimally price a bundle of products or services that maximizes seller's profits. Their focus is on situations in which consumer decision making is on the basis of multiple criteria. For model development and empirical investigation they consider a season ticket bundle for a series of entertainment performances such as sports games and music/dance concerts. In this case, they assume consumer purchase decisions to be a function of two independent resource dimensions, namely, available time to attend performances and reservation price per performance. Using this information, the model suggests the optimal prices of the bundle and/or components (individual performances), and corresponding maximum profits under three alternative strategies: (a) pure components (each performance is priced and offered separately), (b) pure bundling (the performances are priced and offered only as a bundle), and (c) mixed bundling (both the bundle and the individual performances are priced and offered separately). They apply their model to price a planned series of music/dance performances. Results indicate that a mixed bundling strategy is more profitable than pure components or pure bundling strategies provided the relative prices of the bundle and components are carefully chosen. Limitations and possible extensions of the model are discussed.

Seven price-related constructs—five consistent with a perception of price in its “negative role” and two consistent with a perception of price in its “positive role”— are used as independent variables to predict marketplace responses/behaviors in five domains: price search, generic product purchases, price recall, sale responsiveness, and coupon redemption. The price-related constructs explain a significant amount of variance in all five domains, providing evidence of predictive validity. Results of a higher order factor analysis are also reported, which provide some support for the positive-negative perception of price taxonomy.