Enhancing corporate reputation for market expansion in China: customer orientation and the mediating effect of product and service quality

Abstract

Corporate reputation could be a vital means for multinationals to reduce market entry barriers, foster customer retention, and strengthen competitive advantage in China. This study investigates the link between customer orientation, product and service quality, and corporate reputation. We conducted hierarchal regression analyses to examine survey data of 615 foreign firms which entered China by means of wholly-owned subsidies or joint-ventures. Our findings reveal that quality customer services are critical for foreign firms penetrating local markets in China. However, without proper targeting and positioning strategies, even quality products are unable to create the desired efficacy in enhancing corporate reputation. We show that the adoption of customer orientation positively associates with corporate reputation for foreign firms making successful inroads in China; and that product and service quality may be used as marketing means for those firms embracing customer orientation to obtain desired corporate reputation.