Market Orientation and Performance Outcomes: An Empirical Study of Travel Agencies in Taiwan

Abstract

This paper reports the results of a study that found evidence to support the importance of customer satisfaction and customer loyalty in the relationship between market orientation and financial performance. The performance of travel agencies in Taiwan was examined with data collected through a questionnaire survey completed by the managers of 292 travel agencies in Taiwan. Analysis using structural equation modelling revealed that market orientation influences the financial performance of travel agencies indirectly through customer satisfaction and customer loyalty. Neglecting customer satisfaction may negate any improvements in the level of performance that have been gained by adopting a market orientation. It was found that market orientation does not affect financial performance unless the two mediators, customer satisfaction and customer loyalty, are applied concurrently.