Market orientation for small manufacturing suppliers: the importance of product‐related factors

Abstract

PurposeThe purpose of this paper is to investigate the role of market orientation for small manufacturers vying to be suppliers in the mass retail marketplace. It examines the mediating effect of product‐related factors (market readiness and market level) on the market orientation‐performance relationship. The paper also assesses the performance of these manufacturers using measures such as buyer review and actual product acceptance.Design/methodology/approachThis paper uses the results of a program, designed to evaluate and develop small manufacturers for the mass retail marketplace, to test the effect of a market orientation philosophy and product‐related factors on small firm performance.FindingsIt is found that while a market orientation is critical for the success of these manufacturers, product‐related factors have an even greater value in assessing their performance. Specifically, an evaluator's assessment of a product's readiness for the marketplace and his/her recommendation for the type of market it should enter were much better at predicting product performance for the small manufacturers taking part in the program.Practical implicationsThe paper shows that small firms wanting to supply the mass‐merchandising marketplace should not rely solely on market orientation when trying to compete at this level. Market orientation may improve your market readiness, but it does not predict success for small manufacturers. Instead, low market orientation levels and poor product‐related factors strongly predict failure.Originality/valueTo the authors' knowledge no other articles examine market orientation's effect on small manufacturing performance using specific product‐related measures as a mediating variable.