Journal of Business Research xxx (2011) xxx–xxx
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Journal of Business Research
Brand orientation and market orientation — From alternatives to synergy ☆ Mats Urde a,⁎, Carsten Baumgarth b, Bill Merrilees c
a b c
Lund University, Sweden Berlin School of Economics and Law, Marketing Division, HWR Berlin, Germany Department of Marketing, Grifﬁth Business School, Gold Coast Campus Queensland 4222, Australia
a r t i c l e
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a b s t r a c t
This paper explores the interaction between brand orientation and market orientation. Brand orientation is an inside-out, identity-driven approach that sees brands as a hub for an organization and its strategy. Similarly, market orientation is an outside-in, image-driven approach. Initially, brand orientation and market orientation appear to be two different strategic options. Though synergistic combinations are also possible, they are not explored in previous theories, nor labeled as part of branding practice and philosophy. A new type of orientation, a hybrid between brand and marketing orientation, is among the key ﬁndings of this study. The paper articulates typical trajectories for evolving the orientation and aspires to move the discussion from the tug-of-war between the two paradigms by developing a more dynamic view. The study paves the way for better understanding, operationalization and evaluation of alternative approaches to marketing. © 2011 Elsevier Inc. All rights reserved.
Article history: Received 1 October 2010 Received in revised form 1 March 2011 Accepted 1 April 2011 Available online xxxx Keywords: Brand orientation Market orientation Strategic orientations Synergy
1. Introduction The discussion about market orientation and brand orientation is in essence concerned with a company's or organization's approach to brands and the market. Is it the brand identity or the brand image that serves as a guiding light? Should a company's management primarily take the outside-in perspective or the inside-out perspective when guiding their brands? Or should they select a brand approach that is a combination of these two perspectives? How can management square the general principle that the customer is king with the speciﬁc belief that our brands are our greatest assets? 1.1. The brand and the business In 1989, Nestlé acquired the British confectionery company Rowntree for 4.5 billion USD, which was six times its book value and twenty-six times its annual proﬁt. The ﬁxed assets were 600 million USD, and Nestlé paid 3.9 billion USD for what were described as ‘other values’. Their head of marketing commented in an earlier research study: “How much are brands such as Kit Kat, After Eight, Lion, Polo, and Smarties worth? Brands, brand management, sectors, segments ☆ The authors thank the participants in the Sixth Thought Leaders in Brand Management Conference for many interesting suggestions and gratefully acknowledge the helpful comments of the three anonymous Journal of Business Research reviewers. ⁎ Corresponding author at: Department of Business Administration, Box 7080, SE 220 07 Lund, Sweden. E-mail addresses: email@example.com (M. Urde), firstname.lastname@example.org (C. Baumgarth), bill.merrilees@grifﬁth.edu.au (B. Merrilees). 0148-2963/$ – see front matter © 2011 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2011.07.018
are equities valued differently from one ﬁrm to another… The value becomes a strategic value” (Urde, 1997, p. 12). The Rowntree case is a prominent example, acting as a milestone in the way marketers view, consider and work with brands as strategic resources, a fundamental characteristic of the brand orientation approach. A senior vice president at Nestlé remarked in the same study upon the difference between market orientation and the proposed deﬁnition of brand orientation: “Market orientation is on a more uncomplicated, short-term, and fundamental level. If an...