Measuring customer focus: an examination of the relationship between market orientation and brand valuation

Abstract

A market orientation approach is the ultimate expression of a focus on customer value. Although measuring market orientation is an ideal means of assessing changes in customer value, more directly quantifiable measures are often necessary. In response to the challenges associated with managing an intangible and the need to construct a mechanism for measuring customer value, brand valuation has emerged as a viable tool to assist in these processes. For companies with strong brands, brand valuation is an effective measurement for helping to achieve a market orientation strategy that is focused on the customer. This research investigates a sample of companies with strong brands to provide the first evidence of a relationship between market orientation and brand valuation. The study results indicate support for the proposition that companies with strong brands which pursue market orientation are more likely to use brand valuation. In addition, support is provided for the positive effect of a market orientation on organizational performance. Importantly, this effect is found in a sample of firms rather than in business units within a single company. The results also indicate that companies with strong brands pursing a market orientation strategy are less likely to have a short-term orientation which focuses on immediate sales rather than long-term brand development.