1

From market orientation to brand orientation –

back tracking and mapping routes forward

Carsten Baumgarth
Bill Merrilees
Mats Urde

Conference: 6th Thought Leaders International Conference on Brand Management

Prof. Carsten Baumgarth, PhD

HWR Berlin - School of Economics and Law
Marketing Division
E-Mail: cb@cbaumgarth.net
Website: www.cbaumgarth.net

Prof. Bill Merrilees

Griffith University
Griffith Business School
Department of Marketing
Tel: 61 7 5552 7176
E-mail: bill.merrilees@griffit.edu.au

Assoc.-Prof. Mats Urde, PhD; Docent

Lund University
School of Economics and Management, Lund University
Tel: +46 42 343444 (direct)
E-Mail: mats.urde@fek.lu.se
Website: www.ehl.lu.se
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Abstract:

In this article we trace the roots and map possible future routes for the concept ‘brand
orientation’. This is an approach with brands as a strategic hub for the organization. The
processes of the brand oriented organization revolve around the creation, development, and
protection of brand identity in an ongoing interaction with target customers, and with the aim
of achieving lasting competitive advantages in the form of brands.
Our point of departure is a literature review comparing the philosophies of brand orientation
with those of market orientation. We compare both on different perspectives such as
theoretical foundation, corporate culture, behavior, and performance outcomes. Furthermore,
we link the two strategic orientations to classical topics of marketing. Moreover, we suggest
four possible ways to understand the relationship between brand and market orientation: A)
Two different strategic options, B) An natural evolution, C) An option for some, D) Different,
but synergetic.
Our purpose is to develop ideas and an agenda for further research, with the aim to better
understand, operationalize and evaluate brand orientation.
Keywords:
Alternative paradigms, brand orientation, market orientation, strategic orientations.
 3

From market orientation to brand orientation –

back tracking and mapping routes forward

1. Introduction
In 1989 Nestlé acquired the British confectionary company Rowntree for 4.5 billion USD,
which was six times the book value, 26 times the annual profit. The fixed assets amounted to
600 million USD, and Nestlé paid 3.9 billion USD for “other values”. Camillo Pagano, Head
of Marketing Department at Nestlé, commented: “How much are brands such as Kit Kat,
After Eight, Lion, Polo, and Smarties etc. worth? Brands, brand management, sectors,
segments are equities valued differently from one firm to another. If I am trying to buy a
business the value for me, and the value for him, will vary. The value becomes a strategic
value” (Urde, 1997, p. 12). This is one example, now often referred to in the literature, as a
milestone in the way we view, think of, and work with brands as strategic resources. This is
now 2O years ago. Have our understanding of brands, the role of brands, and the management
of brands fundamentally changed, or are these examples just anomalies, i.e. rare exceptions
from the rule that can be disregarded? When Thomas Kuhn (1962; 1977) speaks about
paradigm shifts he describes a change of practice, theoretical applications, set of fundamental
rules that define an area or discipline. Identifying a shift of paradigm is in a narrow sense,
what is thought in textbooks, and in a broader sense, what is seen as the theoretical foundation
for the area. We are now in the position where we need to back-track and reflect on the
development within our area of strategic managing of brands. If we, let’s say, compare a
Kotler Marketing text book with a Kapferer reader on Strategic Brand Management, what
conclusions can we draw? If we think of “new” concepts such as identity, brand equity, core
values, corporate branding, internal branding, brand leadership, and reputation – how has
theory evolved? And, how are brands used and managed in practice? Brand orientation was
originally described as a new approach to brands; a mindset that focuses on brands as
resources and a strategic hub.
The objectives of this conceptual article are to review the literature about the two concepts
(market orientation and brand orientation), to identify the main differences, to link both
concepts with classical concepts of marketing and to develop an agenda for further research.
In this paper, we propose a range of possible approaches in terms of the relationship between
market orientation and brand orientation. The two strategic orientations can interact in an
exclusionary, facilitative or synergetic fashion. The purpose of the paper is to clarify the
brand orientation concept and to open up the debate about how to conceptualize brand
orientation, partly by back-tracking what is known and partly by mapping out possible future
directions.
A deep understanding of the brand orientation concept and a clear distinction to the classical
market orientation concept is for practical management important. Without a clear picture of
brand orientation, an implementation of this strategic orientation is difficult. For example, the
management has to understand the philosophy of brand orientation, the “best fitting”
marketing instruments and marketing metrics. Moreover, a lot of empirical studies have
shown the positive influence of brand orientation on different categories of company
performance outcome. In order to improve the brand orientation of a company, the manager
has to understand the development from a market to a brand oriented company. Our four
frameworks discuss the possible developments form a market or customer oriented company
to a brand oriented company or organization. Further research has to analyze which of the
four frameworks is the best model of the reality for the individual company in different
contexts. Therefore, our four frameworks are a starting point for future research studies.
 4

2. Literature review
2.1 Definitions

The concept of brand orientation is in comparison to market orientation a recent framework.

The papers of Mats Urde (1994; 1999) are pioneer works in this research area. Similar to
market orientation research, the literature has addressed the construct’s definition and
theoretical foundation, the scale development, and the link of brand orientation with the
antecedents as well as with performance outcomes. Not so clear but similar it is possible to
differentiate between a cultural and a behavioral definition (Bridson and Evans, 2004). The
cultural perspective underpins the internal anchorage of the brand and the management of
brands inside the whole organization and in the corporate culture. On the contrary, the
behavioral definition of brand orientation enumerates concrete instruments like brand
communication or brand controlling. In summary, the common characteristic of all brand
orientation definitions is the focus on the internal anchorage of the brand and brand
management inside the company. The formulation, the “living” and the communication of a
brand statement is the heart of this orientation. As a consequence, brand orientation can result
in purposely “not satisfying the needs and wants” of some customer groups and the exclusion
of customer segments. It is possible to say “yes” but also “no”, referring to the brand’s values
and vision.
The concept of market orientation (sometimes synonymous with customer orientation, see
Deshpandé, Farley, and Webster, 1993) is a classical concept of marketing. Seminal articles
on this topic are the papers of Kohli/Jaworksi (1990), Narver/Slater (1990) and Shapiro
(1988). Research in this area has addressed the construct’s definition and theoretical
foundation, the development of a measurement instrument, and the empirical analysis of
determinants and performance effects of market orientation. Basically, two perspectives on
market orientation can be distinguished (Homburg and Pflesser, 2000; Meehan, 1996): a
cultural and a behavioral perspective. The cultural perspective defines market orientation as a
special kind of corporate culture or as a mindset of a company (Deshpandé et al., 1993;
Homburg et al., 2000; Narver et al., 1990). In contrast, the behavioral perspective describes
market orientation in terms of concrete instruments, tools or behaviors (Kohli et al., 1990;
Shapiro, 1988). Briefly, market orientation is the mindset of the company or concrete
instruments, which considers the actual and latent needs, and wants of individual customers.
The satisfaction of each customer is the core of this orientation.
Table 1 compares the two constructs and the two perspectives.
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- Insert Table 1 about here -

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2.2 Concept of strategic orientation

First, market and brand orientation are two different types or specifications of corporate
culture and corporate behavior. A research stream which considers different types of
corporate culture and behavior is the concept of strategic orientations, which has been defined
as “…the guiding principles that influence a firm’s marketing and strategy-making activities”
(Noble, Sinha, and Kumar, 2002, p. 25). By the integration of the idea that a strategy is not
always the explicit choice of the management, but also the pattern of decisions or the results
of organizational learning (Mintzberg, 1989), the framework of strategic orientation is useful
for the application in the brand and market orientation context. Previous research addresses
 5

the conjunction of market orientation with other strategic orientations: (1) innovation or
technology orientation (Berthon, Hulbert, and Pitt, 1999; Gatignon and Xuereb, 1997; Olson,
Slater, and Hult, 2005; Zhou, Yim, and Tse, 2005), (2) learning orientation (Baker and
Sinkula, 1999), (3) entrepreneurial orientation (Miles and Arnold, 1991; Zhou et al., 2005),
and (4) production and cost orientation (Noble et al., 2002; Olson et al., 2005). In addition to
that, some researchers have differentiated between different types of market orientation
(Noble et al., 2002). Very little research applies to the relationship between brand orientation
and market orientation.
In summary, brand and market orientation are two possible strategic orientations of a
company. However, the previous research has compared market orientation with other
strategic orientations, but the research on the comparison between market and brand
orientation is scarce. In this article, we seek to extend our knowledge about the two central
marketing concepts. Our discussion investigates the similarities and differences between the
two concepts on four levels: (1) theoretical foundation, (2) corporate culture, (3) behavior,
and (4) performance outcomes.

3. Comparison of brand and market orientation

3.1. Theoretical foundation

Brand orientation is primarily an inside-out oriented strategic orientation. The literature

characterized brand orientation often as a mindset and a resource of the company (Urde, 1999;
Yakimova and Beverland, 2005). A basic theory to analyze resources of a company is the
resourced-based view (Barney, 1991; Prahalad and Hamel, 1990). This theoretical approach
can explain the character of brand orientation as a resource, the internal development of this
resource (Urde, 2003) as well as the relationship between brand orientation and performance
outcomes.
Moreover, the brand theory brand identity can help our understanding of brand orientation
(Burmann, Jost-Benz, and Riley, 2009). Similar to the brand orientation concept, the brand
identity model addressed an internal view of brands. In the basic model, a strong brand is
based on a strong brand identity and in the long run, a high fit between internal brand identity
and external brand image. In addition, the brand identity concept explains the brand
management as the management of the internal brand identity. This approach neglects the
possibility of a direct creation of a brand image by the brand owner. In contrast to the brand
identity, the brand orientation complements the internal perspective of brand management by
the consideration of the internal importance of the brand concept on the top management level
as well as the internal anchorage of the brand concept in the whole company.
In contrast to the brand orientation, the market orientation is primarily an outside-in concept.
Therefore, theories that explain the customer behavior are the main theoretical pillars of
market orientation. In general, all partial theories of customer behavior are relevant for the
market orientation construct. In detail, the theory of customer satisfaction (Szymanski and
Henard, 2001) is the theoretical pillar of market orientation.
3.2 Corporate culture

Brand and market orientation can be interpreted as two distinct types of corporate culture. The
literature offers a wide range of conceptualizations of corporate culture (Cameron and Quinn,
2006; Deshpandé and Webster, 1989). A seminal model is the corporate culture model of
Edgar Schein (1984; 2004). This model distinguishes between three different, but interrelated
layers of corporate culture: underlying assumptions, espoused beliefs and values, and
artifacts. This general corporate culture framework has adapted to the market orientation
 6

(Homburg et al., 2000) as well as to the brand orientation domain (Baumgarth, 2009; Urde,
2009). Both research streams changed a little bit the characterization and wording of the three
layers: (1) values, (2) norms, and (3) artifacts or symbols. Table 2 enumerates examples of the
brand and the market oriented corporate culture layers.
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- Insert Table 2 about here -

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3.3 Behavior

The focus of this level is the link of market and brand orientation with concrete tools and
instruments. An exhaustive collection is beyond the scope of this article, but the short
discussion of some selected instruments (information and action instruments) should clarify
the argumentation.
The brand orientation is characterized by the internal anchorage of the brand inside the whole
company and the “translation” of this internal brand identity through congruent brand
messages (e.g., values, communication, and product). Classical instruments of marketing with
a strong link to the brand orientation concept include internal branding (de Chernatony,
Drury, and Segal-Horn, 2003; Mitchell, 2002; Punjaisri and Wilson, 2007), corporate identity
and corporate design (Birkigt and Stadler, 2002;Olins, 1878; van Riel and Balmer, 1997),
integrated marketing communication (Cornelissen, 2000; Schultz, Tannenbaum, and
Lauterborn, 1995) and measurement of brand equity (Ailawadi, Lehmann, and Neslin, 2003;
Kapferer, 2008 Keller, 1993; Yoo and Donthu, 2001).
In contrast, market orientation focuses on the satisfaction of individual and changing customer
needs and wants. Behaviors with a high link to the market orientation are market
segmentation (Beane and Ennis, 1987; Wedel and Kamakura, 2002), customization (Franke,
Keinz, and Steger, 2009), adaptive selling (Spiro and Weitz, 1990), customer relations
management (Reinartz, Krafft, and Hoyer, 2004), customer satisfaction surveys and
calculation of customer lifetime value or customer equity (Rust, Lemon, and Zeithaml, 2004;
Venkatesan and Kumar, 2004).
3.4 Performance Outcomes and marketing metrics

One of the central ideas of the strategic orientation concept is the analysis of the influence of
different strategic orientations on the (corporate) performance. Moreover, the literature on
marketing accountability and marketing controlling discussed the influence of strategic
orientation on the selection of marketing metrics (Ambler, Kokkinaki, and Puntoni, 2004).
Therefore, in the distinction between brand and market orientation, the link to the
performance outcome and the marketing metrics is also an important step for a deeper
understanding of these concepts. On a conceptual level, a distinction between market- or non-
financial and financial outcomes is possible (Venkatraman and Ramanujam, 1996). Based on
market outcomes, the brand and market orientation pursue different goals. Typical market
goals of brand orientation are brand awareness, brand attitudes, brand loyalty and brand
equity. Market orientation has goals like customer satisfaction, customer loyalty and customer
equity.
At the end of the market or brand orientation chain, however, both strategic orientations have
the same financial goals: turnovers or profits, market share and corporate or shareholder
value.
 7

3.5 Interim conclusion

In the previous sections, we compared brand and market orientation on different perspectives:
theoretical foundation, corporate culture, concrete behaviors, as well as performance
outcomes and marketing metrics. Furthermore, we linked market and brand orientation with
classical topics of the management and marketing science. The discussion clarifies that brand
and market orientation are clear different concepts. Figure 1 summarizes the main differences.
----------------------------------------

- Insert Figure 1 about here -

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4. Alternative configurations: Relationship between brand and market orientation

Brand orientation and market orientation are distinct strategic orientations. However, the
question is what is the relationship between these two concepts is? For future academic
discussion, we offer four possible configurations. In order to communicate our idea, we use
metaphors for the four categories.
4.1 Framework I: Option model (“Apples-and-oranges”)

The first configuration assumes that brand and market orientation are two real options or
alternatives. The management has to select between the two options. This framework
interprets the two options similar to two strategic options. For example, Porter recommends in
his famous framework of competitive strategies the choice of quality or cost leadership
(Porter, 1980). A combination of both options is not possible or not effective. The metaphor
of apples-and-oranges symbolizes the idea of two really different and contradictory
alternatives.
4.2 Framework II: Evolution model (“Man evolution”)

Rather than competing paradigms, an alternative conceptualization is to reconcile the two

orientations in a linked manner. Few studies attempt to do this. Perhaps the most overt attempt
is Reid et al. (2005) which discuss at a conceptual level the relationship of market and brand
orientation in the context of integrated marketing communication. Market orientation is
conceived to be foundational to brand orientation, though this is a peripheral aspect of their
paper which is more about how each of the orientations are related to integrated marketing
communications. Reid et al. (2005) consider the consumer as the common thread between
market orientation and brand orientation since brand orientation provides a means of
translating the long-term objectives of market orientation into an actionable set of activities.
Urde (1999) compares the market and brand orientation on a conceptual and theoretical level.
In his interpretation, the focus of market orientation is mainly the satisfaction of customer’s
needs and wants. In contrast to that, brand orientation is more an internal, resource concept.
Although some of the cases examined by Urde see brand orientation as building on market
orientation (hence more sophisticated), there is also a natural tension between the two
concepts. Having the brand as a strategic platform means that the firm cannot respond to
every change in consumer needs. The case studies investigated by Urde (1997; 1999) are
relatively sophisticated companies with long brand building experience and long brand track
records. The implication is that not all companies are able acquire or build the resources
needed, adopt and integrate the mindset, and develop the skill to manage brands this way.
 8

Also Harter et al. (2005) describe a development from a brand-agnostic over a emerging
brand to a brand guided company (similar Wong and Merrilees, 2005).
Framework II interprets brand orientation as the natural development, the logical next level of
market orientation. The metaphor man evolution communicates this idea.
4.3 Framework III: Sequel model (“Ladder”)

Framework II suggests a more or less automatic progression from market orientation to brand
orientation. In contrast, Framework III proposes that some firms may never take the journey
to brand orientation. Some firms might not see the benefits in brand orientation (Wong et al.,
2005) and therefore not be motivated to do so. Similarly, some firms are blissfully unaware
that there is such a thing as brand orientation, given that this is relatively new concept, less
than twenty years old (Urde, 1994). Other firms may lack the capabilities (including
leadership) to develop a strong brand orientation (Wong and Merrilees, 2008).
The advancement from market orientation to brand orientation is also contingent on industry
and market situations. For example, highly interactive, personalized services such as
barbershops may never evolve to a brand orientation. The barber is a classic market-orientated
service company who knows the different needs of his customers, fulfills these needs,
adapting his behavior to match the needs of each customer. In structural model terms,
situation variables would moderate the market to brand orientation path.
In this framework, the management decides on the basis of the internal resources and the
external situation about the advancement of the market orientation to a brand orientation. The
metaphor of a ladder characterizes this framework. It is not always the longest ladder that is
the best one. The quality of the ladder is a function of internal resources and external
conditions. The fireman or the manager has to select the best-fitting ladder.
4.4 Framework IV: Pluralistic model (“Ying-Yang”)

An alternative interpretation of Urde (1999) is that there is a natural dialectic between market
orientation and brand orientation, which could be resolved not in a sequential or evolutionary
manner, but morph into a hybrid concept. This possibility is consistent with the early quote by
the Nestle senior vice president in Urde (1999) who finds it difficult to think of the two
concepts separately. Notwithstanding, no one has systematically formulated such a pluralistic
market and brand orientation construct. Future research could revisit old case studies or
embark on new case studies to see if there is any merit in creating a pluralistic market
orientation combined with brand orientation concept.
The Chinese symbol Ying-Yang can symbolizes this framework. Both concepts are different,
but closely related and the market orientation facilitates the brand orientation and vice versa.
Figure 2 summarizes the four frameworks of the relationship between brand and market
orientation.
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----------------------------------------

5. Summary and agenda for further research

The appropriateness of which of the above four frameworks or paradigms is contestable. Two
types of empirical investigation are possible. Firstly, Frameworks III and IV require greater
 9

conceptual understanding of the relevant constructs. Therefore, they would benefit from case
research studies, along the lines of Urde (1999).
Secondly, Frameworks I and II could progress into quantitative testing. In simple terms,
Framework I implies that either market orientation or brand orientation is dominant and a
well-designed empirical study could address this proposition. Framework II (and maybe III)
could be tested in a simple sequential way, as path from market orientation to brand
orientation. However, as discussed, the path to brand orientation may be more complex, with
additional mediation from say brand-orientation norms (Baumgarth, 2009). Additionally, the
path from market orientation to brand orientation may be moderated by situational factors,
such as the market or industry conditions. For example, high-touch, customized industries like
barber shops may not progress from market orientation to brand orientation.
If the quantitative route is pursued, the development of a scale (the different levels of our
framework in Fig. 1 can support this process) is an important further step. A fundamental
condition of the scale development is the high discriminant validity, especially in comparison
to market orientation (quantitative approach, procedure for the development of scales;
MTMM-approach, expert validation etc.). On this basis, empirical large-scale studies can
compare the influence of market and brand orientation on performance outcomes. An
integration of additional orientations like innovation orientation, cost orientation etc.
(quantitative studies; similar to studies about strategic orientation) can broaden this research
stream.

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Brand orientation Market orientation

Cultural “… the extent to which the “… is the business culture that most
organization regards itself as a effectively and efficiently creates superior
perspective brand” (Hankinson, 2001, p. 232) value for customers.” (Narver et al., 1990,
p. 20)
“…creating a unique brand “…is the organizationwide generation of
Behavioral identity, structuring brand market intelligence pertaining to current
portfolios, managing brand and future customer needs, dissemination
perspective communications and monitoring of the intelligence across departments,
brand values” (Ewing and Napoli, and organiaztionwide responsiveness to it.
2005, p. 843) (Kohli et al., 1990, p. 6)
Table 1: Definition of market and brand orientation

Brand orientation Market orientation

ƒ brand values and positioning is ƒ satisfaction of customer needs

the main orientation for all
management decisions
Values ƒ brand value and brand
identification
ƒ continuity
ƒ uniqueness
ƒ Inside-out perspective
ƒ The brand in centre
Norms ƒ Commitment to what the brand
strand for
ƒ powerful brand manager
ƒ stories about the “living” of the
brand promise
Artifacts
ƒ brand oriented architecture of the
buildings and trade stands
Table 2: Comparison of a market and a brand oriented corporate culture
ƒ customer value and customer
loyalty
ƒ low level of time stability,
because customer needs are
changing
ƒ customer satisfaction
ƒ outside-in perspective
ƒ The customer in centre
ƒ satisfy the customer needs
ƒ powerful key-account manager
ƒ stories about especially effort in
order to satisfy customer needs
ƒ open and for customer
understandable architecture of
buildings and trade stands
 14

cultural perspective behavioral perspective performance outcomes/

(corporate culture/ (concrete instruments) marketing metrics
strategic orientation) market financial
internal external outcomes/metrics outcomes/metrics
ƒbrand is a central
orientation of the
ƒ integrated
top management ƒ corporate
Brand communi- ƒbrand attitudes
ƒconsistent and design
cation ƒbrand loyalty
orientation congruent brand ƒ internal
ƒ image ƒbrand equity
promise branding
analysis
ƒinside-out-
approach

Ressource-based view
Brand identity approach ƒturnover or profit
dominant ƒmarket share
theoretical ƒcorporate or
perspectives shareholder
Consumer behavior theories value
Confirmation-disconfirmation paradigm
ƒ adaptive
ƒcustomer is a selling
central ƒ market
ƒ sales ƒcustomer
orientation of the segmen-
training satisfaction
Market top management tation
ƒ CRM ƒcustomer loyalty
ƒfulfilling of ƒ customi-
orientation customer needs systems ƒcustomer lifetime
zation value
ƒoutside-in- ƒ satisfaction
approach surveys

Figure 1: Differences between brand and market orientation

Option model Evolution model

(“Apples-and-oranges“) (“Man evolution“)
Brand and market orientation are Brand orientation is the next natural level
different strategic options of the market orientation development

Sequel model (“Ladder“) Pluralistic model (“Ying-Yang”)

Brand orientation is an enhancement Brand and market orientation are different,
of market orientation, but not always but synergetic strategic orientations.
an effective choice”

Figure 2: Metaphors for the configuration of brand and market orientation