Effects of Market Orientation Practices On Business Performance of Hotels in Nigeria

Proceedings of the International Conference on Marketing, Tourism & Hospitality
(IC17New York Conference) ISBN: 978-1-943579-13-6

New York-USA. 28-30, April 2017. Paper ID: NM728
Effects of Market Orientation Practices on Business Performance

of Hotels in Nigeria
Udegbe, Scholastica Ebarefimia,

Department of Marketing,
Lagos State University, Nigeria.
E-mail: scholasticudegbe@yahoo.co.uk
_____________________________________________________________________________________________
Abstract
The purpose of this study was to investigate the practices of market orientation with specific
focus on the extent to which hotels in Nigeria places emphasis on the different dimensions of
market orientation, customer satisfaction, competiveness, market intelligence, strategic
deployment, internal integration, market knowledge management, organizational
infrastructure, customer interface design, organizational culture and assessment of the
effectiveness the strategies adopted based on business performance. The study uses a
contextualized and literature based research instrument to measure the application of market
orientation “construct” by 120 hotels operating in Nigeria. Data were gathered through self-
administered questionnaires directed to the top, and middle-level managers of three –to-five
star rated hotels in Nigeria. The research instrument showed encouraging evidence to a high
extent of reliability and validity. Data were interpreted by factor analysis. The study found that
market orientation is practiced by the surveyed hotels as their core marketing strategy. Market
orientation practices was positively linked to business performance. High emphasis is placed
more on customer / client services. Feedback from the result of research projects will assist to
expand knowledge as to the practice of market orientation activities by hotels in Nigeria,
thereby potentially contains information for Nigerian business men. Further, the study will
serve as a guide for practitioners and researchers in other developing countries.
_______________________________________________________________________
Key Words: Market Orientation, Hotel, Factor analysis, Performance, Nigeria.
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www.globalbizresearch.org
1. Introduction
For the past three decades, the subject of market orientation in one form or another has
occupied the centre stage of the theory and practice of marketing strategy. It has attracted
immense attention from marketing academics. Market orientation is a focus on consumer needs.
It provides and continuously improves perceived value quality and satisfaction with in a long-
term horizon with a view to achieving superior business performance (Okumus, 2003).
Management theorist have long suggested that, key to success in business lies in understanding
and providing what customer want and need (marketing concept), rather than in focusing on
what the firm has to sell . Market orientation is considered as a marketing concept as well as a
management strategy (Mokhtar et al, 2014; Ramayal et al 2011; Binge et al 2003; Ellis 2006;
Guo 2002; Wang et al 2012)
Several propositions pertaining to the antecedents of a market orientation have been
advanced by several authors with references to large industrial firms but only few studies have
investigated the practices and effects of market orientation on performance in the Nigerian hotel
setting. Therefore, this study provided new and more insights into the understanding of market
orientation practices in hotel industry, particularly in Nigeria.
The aim of this research is to provide knowledge regarding the market orientation practices
in the Nigerian hotel industry , to examine the effects of market orientation on business
performance, to determine the extent to which Nigerian hotels emphasizes satisfaction of their
target customers and clients , and to suggest other relevant areas for future research.
In achieving the aim of the research ,the paper starts with a critical look at literature review
on market orientation practices, and goes on to consider the variables of market orientation, and
finding the level of emphasis in market orientation practices, and its impact on business
performance in hotels operating in Nigeria environment. .The finding from the study is
followed by the implications for theory and practice, as described in the concluding comments.
2. Literature Review
Since the beginning of the 90’s the concept of market orientation has attracted immense
attention from marketing scholars and academics. This is not surprising because, it is closely
related to fundamentals of marketing theory (i.e. marketing concept). With the implementation
of market orientation activities, many companies have pursued to enhance their performance
and effectiveness in search of achieving differentiation in the market. Kohli and Jaworski
(1990) and Naver and Slater (1990) are often cited as founders of conceptualization and
measurement instruments for assessing market orientation construct. In recent years however,
improvements or alternative approaches have been suggested by different authors (Deng and
Dart (1994), Lado et al, (1998), Gray et al (1998); Lafferty and Hult (2001), Vargo and Lusch,
2
2004, Gorenroos (2000), Loing et al (2002), Tomaz (2005 ; Harris 2002 ; Maydeu – Olivares
& Lado 2012 ), among others.
Kohli and Jaworski (1990) defines market orientation as the organisation wide generation
of market intelligence pertaining to current and future needs of customers, dissemination of
intelligence within an organisation and responsiveness to it. Later, Narver and Slater (1990)
defined market orientation as the organisational culture that most effectively and efficiently
crates the necessary behaviours for the creation of superior value for buyers and thus superior
performance for business. These authors define three basic (content / focusing) components of
the construct as: customer orientation, competitor orientation and inter-functional co-
ordination. To the three basic components they also added two decision criteria, long-term
focus and profitability. . Earlier, Shapiro (1988) defined market orientation as a managerial
decision-making practice with a commitment shared within the organization.
However, Deshpande, Farley and Webster (1993) challenged both conceptions. They see
market orientation as being distinguishable from competitor orientation. They posit that putting
customer interest first should be the main focus of market orientation. They argue that
competitor orientation can be almost antithetical to customer orientation when the focus is more
on the strength of competitors than on the unmet needs of the customer.
According to Hilman and Kaliappen ( 2014 ), in his work on market orientation , Hult and
Ketchen (2000) and Voola and O’Cass (2010) identified market orientation as the set of
organizational capabilities that facilitates to serve targeted customers and monitor the
organization’s competitors more efficiently. It is precisely concerned with intangible
competencies, namely organizational culture as demonstrated by the link between competitor
orientation and customer orientation and performance. Thus, dynamic capabilities were found
to be an appropriate perspective to describe this study that highlighted market orientation and
performance linkages
Market orientation may also be seen as a model of market management behaviour which
emphasis customer satisfaction coordination of functional marketing activities, sensitivity to
competition and intelligence and mutually – satisfactory measures of performance (Martin and
Grbac, 2003; Liu and Wang, 2009; Zhou et al, 2009).
Marketing orientation may be seen as a model of service marketing which emphasizes, six
dimensions representing key organisational leverages, through which customer focus is
implemented (Tomaz, 2005). Customer focus is a focus on customers’ needs by providing and
continuously improving the value quality and satisfaction within a long-term time horizon with
a view to achieving superior market performance. With respect to the proposed definition,
Tomaz purpose model which consist of six dimensions: Strategic Deployment, Internal
Integration, Market Knowledge Management, Organisational Infrastructure, Customer
3
Interface design and Organisational culture.

With respect to this proposed dimensions, the present research provides fact – based
evidence on the incidence of market orientation in hotel industry in a developing economy
(Nigeria), and it also help to judge and classify the responding hoteliers according to their level
of market orientation practices.
A clear understanding of Nigeria showed that Nigeria is pride of place among the richly
endowed potential tourist destination in Africa. Nigeria is a country greatly endowed. It is
blessed with warm, sundry climate, fascinating beaches, and evergreen vegetation in the south,
while in the North savannah grasslands. Added to these are interesting natural features in form
of waterfalls, springs, hills, mountainous areas with temperate like climate, and a range of
special species of tropical wildlife. These, coupled with wide market opportunities, diverse
socio-cultural heritage that gives the nation its uniqueness and hospitality of more than
180million people have attracted lots of tourist to Nigeria. Hence, hotel business is one of the
most lucrative business in Nigeria. According to Osuagwu, (2001), “business is any purposeful
activity”, it involves the use of human and non human resources towards the achievement of
set goals and objectives. Generally, interest of government, researchers, and academics in hotel
business over the last decades can be described as overwhelming. This might not be
unconnected with the vital role which hotel industry plays in accommodating tourist, and
earnings of foreign exchange in the economy.
Further argument have been advanced in literature suggesting that a market orientation may
have a strong or weak effect on business performance depending on the environmental
conditions, such as market turbulence, competitive intensity, and technological turbulence
(Houston, 1986 , Wang et al 2012 ). Such potential variation impact market orientation
practices, and the same affect performance across different regions , thus , creating room for
fundamental issue for discussion.
According to Kotter (2002), the set of factors that contribute to the success and survival of
a business today are marketing strategy, dedicated employees, good information system and
excellent implementation of programmers’, being strongly customer focused and heavily
committed to marketing. Further, many of the relevant research efforts have posited that high
extent of market orientation practices is of benefit to any business in the long run. However,
some research work have faulted the validity of such claim (Sundguist et al. 2002), suggesting
that the relationship between market orientation practices and organizational performance or
business success measure is not always positive in some business environment and culture
(Appiah – Adu, 1997, 1998, Atuatiene – Gima, 1995, ). It may be stated therefore, that market
orientation practices may be beneficial to some businesses, but may not be for some other
business as a result of variations in environment, practices, context and culture (Sundquist et
4
al, 2002).
This research, therefore aims to investigate the extent to which hotels in Nigeria places
emphasizes on the different dimensions of markets orientation : customers satisfactions,
competiveness, market intelligence, strategic deployment, internal integration, market
knowledge management, organizational infrastructure, customer interface design,
organizational culture , and assessment of the effect of the strategies adopted on business
performance.
3. Research Methods
The study is a survey that used both primary and secondary data. Primary data were
obtained with the aid of standardised instrument (questionnaires) while the secondary data
were obtained from extant literature. The questionnaire was operationalised into forty-eight
(48) variables of market orientation practices in Section A, twenty four (24) variable of market
orientation performance measure in section B , (all variables adopted from extant literature e.g.
Naver and Slater (1990), Kohli and Jaworski (1990), (Tomaz (2005), Osuagwu (2006). While
Section C represent the demographic profile of the respondent. The data needed was collected
using a six point likert scale ranging from (6) “very high extent ,to no extent at all” (1),
indicating varying degrees of use of the operational practices. Convenience sample method was
used in collecting data.
Questionnaires with instructions were hand-delivered to respondents. The data for this
research was 240 three-star-rated and above hotels in Nigeria. Questionnaires were sent to the
entire study population with the help of employed contract staffs. This study used hotel as the
unit of analysis. Therefore, only one respondent represented each hotel. The survey was
addressed to managers in three- to five-star-rated hotels that registered in Nigeria.
A set of questionnaire with a cover letter was hand delivered to all 240 respondents, and
confidentiality was assured and incentive for participating in the research by making the report
of the research available to the respondents if they so desire was promised. 197 copies of the
questionnaires were found useable for the present study, resulting to an effective response rate
of 82% .The data was analysed using descriptive statistics. The research instrument showed
high reliability and validity. The Cronbach alpha reliability coefficient for market orientation
variable (0.92), and market orientation performance measures (0.84) exceed the value of 0.70,
thus suggesting adequate reliability (Cronbach , 1947). The opinions of scholars of management
of marketing confirmed the content validity of the measures used, while the pilot study result
confirmed their predictive validity.
The findings from the research were presented as Tables I-VI (tables not shown) . However,
the values corresponding to the codes they contain were defined in the Appendix.
5
4. Findings and Discussions

Table 1 shows the descriptive statistics of the emphasis on market orientation practices in
hotel business in Nigeria. Most market orientation practices had reasonable emphasis placed on
them by the surveyed hotels. From the mean values in table 1, it can be seen that all the variable
(A1 to A48) witnessed encouraging degree of practices, with constant analyses of the hotel
level of commitment to serve the needs and wants of customer / clients, A1, mean – 5.91 among
others receive very high emphasis. There is a general consensus in extant literature that an
organization which practices market orientation to a reasonable extent has staff that are
committed to sustained creation of value in goods and services for its customers and clients
(Narver and Slater 1990, Kohli and Jaworski, 1990, Tomaz, 2005, among others). The result in
table I, therefore seems to suggest that market orientation is practiced to a high extent in the
surveyed hotels in Nigeria. Table 1 also shows that “business based on interactive system”, ie
Company is aware of anything happening to customers/clients A15, mean = 3.58 received the
least emphasis among hotels in Nigeria. Hotels that recognize the customers’ requirement are
capable of maximizing their strength and minimizing their weakness in offering their products
or services ( Chin, Lo, & Ramayah, 2013; Liu & Wang, 2009; Martin & Grbac, 2003).
Table II shows the descriptive statistics of the extent of importance placed on market
orientation performance measures by the surveyed hotels. From the mean value in table II it
was seen that all variables (B1-B24) witnessed encouraging degrees of market orientation
performance measurement, with “customer service /client services” B1, mean = 5.78 having
the most achieved performance measure. There is a general consensus in extant literature that
an organization which practice market orientation to a reasonable extent has good
“customer/client services”. To a reasonable extent they focus on customization, fulfillment of
expectations of customers, management of emotional, social, technological and environmental
elements of interaction relating to customers , Narver and Slater, 1990, Kohli and Jaworski
1990; Tomaz 2005; Groenroos, 2000, Chin, Lo, & Ramayah, 2013; Liu & Wang, 2009; Martin
& Grbac, 2003, and among others.
The result in table II, therefore suggest that most achieved market orientation performance
measure of “customer / client services” can be explained to be in line with suggestion in extant
literature . Nigerian hotels focus on customer needs is high and also Nigerian hotels attach a lot
of importance to providing and continuously improving perceived service, value, quality and
satisfaction. Table II, also shows, that “staff reward system” B6, mean = 4.14 received the least
market orientation performance measure by surveyed hotels. This can be explained from the
drive in today’s business environment where Nigeria is experiencing economic recession and
market trend focus are centered towards cost reduction.
Table III shows the Barlett’s test of sphericity (P = 0.000) and the Kaiser – Meyer – Olkin
6
(KMO) measure of sampling adequacy (0.862).

The data’s suggest that the measure of market orientation practices and market orientation
performance measures are both suitable for factor analysis because the figures derived are in
line with the stipulated acceptable value of 0.50 – 0.90 (Hair et al (1995).
Table IV shows the total variance explained (factor analysis) of the measure of market
orientation practices of hotels in Nigeria.
The solution explained 78.7999 percent of the total variance with factor explaining 33.12
percent of the variance and factor A2 – A15 explaining 7.3, 4.8, 4.6, 4.3, 3.7, 3.5, 3.2, 2.9, 2.8,
2.4, 2.3, 2.2 and 2.2 percent variance respectively. Effective related issues and issues related
to information sensitivity were the most practiced aspect of market orientation by the surveyed
hotels in Nigeria.
Table V shows the structure matrix (factor analysis) of the principal component analysis of
measure of market orientation practices activities in hotels in Nigeria. Since lower values of
factors loading (in factor analysis) cannot be representative of their respective factors, the most
acceptable cut off point of ± 0.50 was used in this research in line with research suggestions of
Hair et al (1995). From the table, factors 1 contains almost all the aspect of market orientation
issues, except factors 2 which contains issues relating to A43 and A48, factors 3 contain issues
relating to A39 and A44, factors 4, issues relating to A27 and factors 6 which contain issues
relating to A3.
Table VI shows the demographic statistics of respondents and their hotel survey, The
majority of respondents were from top management (94%) and middle management (6%). The
large percentages of participants were from three-star (74.41%), four-star (17.19%), and five-
star-rated hotels (8.4%). The majority of participating hotels had 50 to 100 rooms (39.2%).
With regard to the years of operation, the majority of the participating hotels had been operating
for 11 to 20 years (31%). Approximately 79% of the hotels were located in city / town area. it
was observed that a significant number of the respondents are educated, have significant interest
in the study, thus providing their personal contact such as email, address, phone numbers among
many others. They also belong mostly within the ages of between 40 and 59 years, and occupy
management positions in their respective hotels.
5. Conclusions, Managerial, Implications and Suggestions for Future
Research
This research has, empirically, examined the extent of market orientation practices in hotel
business in Nigeria via the adopted and modified market orientation construct measures. It has
been found that Nigerian hotels generally had high emphasis placed on the practices of market
orientation activities. This research have also shown, from general consensus in extant literature
that there is positive relationship between the practices of market orientation activities and
7
performance, Tomaz, 2005, Kohli and Jaworski, 1990; Narver and Slater 1990; Groenroos,
2000.
The current research has extended the literature of market orientation and performance in
several ways. This study was consistent with several prior empirical findings (Kirca et al.,
2005; Ramayah et al., 2011; Singh, 2009). This study identified those hotels in Nigeria
practicing market orientation as their marketing strategy to attain better performance.
Furthermore, this study provided empirical confirmation on the practices and effects of market
orientation toward organizational performance of hotels in Nigeria, which has been given very
less consideration in the marketing literature so far.
These results may be useful to both academics and business practitioners with interest in
hotel business. Also the market orientation scale used in this research in addition to their
associated results, could enable hotel managers identify their strength and weakness and
relevant areas that need managerial attention.
It is suggested that future research should be done to examine the effect of market
orientation practices at a particular point in time (e.g. the effect during festival period and
reverse)
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Appendix: Key to Research Variables Used In Table I – Vi

A1 =Analyzes level of commitment to serve the needs and wants of customers/clients;
A2 =Measures customers/clients’ satisfaction frequently and systematically;
A3 =know the customers/clients in section of business activity;
A4 =Hotel executives maintain regular contact with present and potential customers/clients.;
A5 =Obtains ideas and suggestions from customers/clients in order to improve business
activities;
A6 =Carries out frequent studies of customers/clients in order to know the business activities
which customers /clients will value in the future. ;
A7 =Frequently gathers data from sector of business operations for use in planning business
activities.;
A8 =Periodically contacts customers/clients to learn about the quality of services;
A9 =Systems are developed to detect basic changes in sector of business activities
A10 =Hotel is able to detect changes in the preference of customers /clients;
A11 =Hotelencourages customers/clients to make comments and complaints about their
services
A12 =Regularly analyses the programmes and activities of other competitors;
A13 =Often examines the probable effect of environmental changes on customers/clients
A14 =Periodic meetings are held between /among organizational departments in order to
discuss relevant business issues.;
A15 =Hotel is aware of any thing happening to customers/clients;
A16 =Reports are frequently distributed to different organizational departments regarding
future business issues. ;
A17 =Hotel department are aware of important changes happenings in order department;
A18=Management team regularly discusses the strengths, weakness and strategies of
competitors;
A19 = Relevant information and data about customers/clients and business issues are
distributed to relevant persons and departments;
10
A20 =There is rapid exchange of ideas and opinions between and among organizational
departments;
A21=The degree of customers’/clients’ satisfaction is made known to all hotel departments;
A22 = Hotel uses information from customers/clients to increase quality of performance; A23
= Hotel uses relevant data from research for the management of business activities ;
A24 =Hotel defines the quality of its business activities in terms of customers or clients
satisfaction.;
A25 = Hotel focuses on what is of value to customers /clients in the planning and development
of new business activities.;
A26 = Hotel keeps promise made to customers /clients;
A27 =The effort to develop new business activities is periodically revised so as to ensure that
it is in line with customer’s /clients desires;
A28 =Customers’/clients’ complaints are attended to rapidly;
A29 =Hotel is sensitive to how customers/clients evaluate business services so that necessary
modifications may be made;
A30 =Hotel uses information from research to identify groups of customers/clients;
A31=Hotel tries to gain advantages in obtaining relevant resources based on the understanding
of customers/clients needs/wants;
A32 =Hotel has achieved encouraging profitability;
A33 =Hotel has achieved encouraging growth in customers /clients base;
A34 =Hotel has achieved encouraging sales turnover;
A35 =Hotel has achieved encouraging revenue;
A36 =Hotel has achieved encouraging reduction in cost;
A37 =Hotel has achieved encouraging level of customers/clients satisfaction;
A38 =Hotel has achieved improved market share;
A39 =Hotel has achieved improved personnel /staff satisfaction;
A40 =Hotel has achieved improved level of social responsibility;
A41 =Hotel has achieved improved level of quality of goods/services;
A42 =Hotel has achieved improved level of unit sales;
A43 = Hotel has been achieving its long term goals;
A44 =Hotel has achieving its short term goals;
A44 =Hotel has been achieving its long term goals;
A45 = Satisfied with hotel’s business practices with regard to attention to customers /clients
hotel has been achieving its short – term goals.;
A46 = Satisfied with hotel business practices with regard to attention to competitors practices;
A47 = Satisfied with hotel’s business practices with regard to gathering using and responding
11
to relevant information pertaining to customers /clients and competitors;

A48 = Satisfied with overall hotel performance in its business operations.
B1 = Customers / client service;
B2 = Taking of business risk (e.g loans)
B3 = Personnel / staff problems;
B4 = Relations among personnel / staff
B5 = Staff-management personnel / staff;
B6 = Staff reward system (e.g. extra pay)
B7 = Staff commitment;
B8 = Staff motivation;
B9 = Awareness of market environment
B10 = Level of competition in its lien of business;
B11 = Technological system used
B12 = Formal market research;
B13 = Changing customer / client needs / wants
B14 = Profitability of its business;
B15 = Growth of customer base;
B16 = Turnover in business operation;
B17 = Customers/client satisfaction;
B18 Achievement of social responsibility goals;
B19 = Achievement of short – term goals;
B20 = Achievement of long-term goal;
B21 = Achievement of personnel management goals
B22 = Achievement of financial management goals;
B23 = Achievement of producing management goals;
B24 = Achievement of market management goals.
12

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Proceedings of the International Conference on Marketing, Tourism & Hospitality

(IC17New York Conference) ISBN: 978-1-943579-13-6

Effects of Market Orientation Practices on Business Performance

Udegbe, Scholastica Ebarefimia,

Interface design and Organisational culture.

4. Findings and Discussions

(KMO) measure of sampling adequacy (0.862).

Appendix: Key to Research Variables Used In Table I – Vi

to relevant information pertaining to customers /clients and competitors;

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