Market Orientation and Export Performance in Thailand: A Moderating Effect of International Marketing Strategy

A lot of literature provides evidence of a positive relationship between market orientation (MO) and performance (e.g., Narver and Slater 1990; Jaworski and Kohli 1993). Some studies, however, found insignificant results of such a relationship (e.g., Selnes, Jaworski, and Kohli 1996; Pelham 1997), resulting in an open question of MO\u27s predictive power on performance. Moreover, most of the research in this area has been conducted in the U.S. context, and the literature shows that there is a need to study MO in a non-U.S. context (e.g., Kohli, Jaworski, and Kumar 1993; Grewal and Tansuhaj 2001). Similarly, the standardization (adaptation) literature reveals that there is a need to study standardization (adaptation) strategy in a Non-U.S. context (e.g., Zou, et al. 1997). Also, although there exist repeated calls to investigate the effect of a standardization strategy (adaptation) on financial performance, little effort into such studies was found. In addition, no prior study empirically examines the role of the international marketing strategy type, standardization v.s. adaptation, as an alternative and potential moderator of the relationship between MO and a firm\u27s business performance. The proposed dissertation extends this body of research and empirically investigates the relevance of market orientation and export marketing strategy in determining export performance. Specifically, this research attempts to address three issues. First, the issue of whether or not MO has a positive effect on export performance is addressed. Second, the issue of whether or not product adaptation strategy has a positive impact on export performance is addressed. Third, the issue of whether or not an international marketing strategy (characterized as high and low product adaptation strategy) moderates a relationship between MO and export performance is also addressed. The hypothetical structural equation model, including market orientation construct, product adaptation strategy construct, and export performance construct, is proposed. Exploratory factor analysis (using SPSS), as well as first-order and second-order confirmatory factor analysis, structural equation model, and multi-sample analysis (using LISREL 8.52) are applied in this research for measurement validity and hypothesis testing. The empirical study involved a mailed survey of 2,200 exporting firms in Thailand and obtained 252 usable responses. Results of the study indicate that (1) export performance is significantly and positively affected by market orientation, that (2) export performance is not significantly and positively affected by a product adaptation strategy, and that (3) the market orientation-export performance relationship is moderated by brand and label adaptation strategy, a subscale of product adaptation strategy. Theoretical and managerial implications and directions for future research are discussed. The results from this study will help to fill the gaps in the literature