Linking Market Orientation To Strategy Through Segmentation Complexity

Abstract

Relying on the cultural view of market orientation, we introduce segmentation complexity as a key mediator between market orientation (i.e., customer orientation and competitor orientation) and the strategies of differentiation, cost leadership, and innovation.  Customer orientation is positively related to segmentation complexity, differentiation, and innovation, and negatively to cost leadership.  Competitor orientation is positively related to all of these strategies.  The indirect effects of both customer and competitor orientation are mediated through segmentation complexity, which is positively related to differentiation and innovation, and negatively to cost leadership.