Leveraging Market Orientation for Real EstateMarch 1, 2014
Samaa Taher Attia, PhD (Egypt)
*This article is an extended summary of a study published in the Journal of Strategic Marketing.
Customers are becoming increasingly sophisticated, and organizations must adapt to meet the changing needs of the marketplace (Hooley et al. 2012). One way companies can respond is to become more market-oriented by focusing on four key components of Market Orientation: customers, competitors, long-term perspective, and inter-functional coordination.
Shifting towards a Market Orientation (MO) is important because of its potential to positively impact company outcomes. In order to effectively interpret the relationship between market orientation and company outcomes, the four components of MO must be evaluated to leverage the positive benefits available to firms.
Our research looks at how companies in the Egyptian business context engage with and value these four MO components in their businesses. Understanding how MO can positively impact business outcomes can also have important implications for real estate professionals looking to respond to the changing marketplace.
The companies from our research focus more on customers than any other MO component. Being customer-oriented means knowing as much about current and potential customers as possible, and adjusting business activities to meet customer needs. The types of activities associated with customer-oriented firms include acquiring information about customers in a target market and disseminating customer information clearly and consistently across the organization (Narver and Slater 1990).
Creating value for the customer should be a firm's ultimate goal. For real estate professionals, obtaining accurate customer information to uncover where and how value is created in the real estate process will lead to greater customer satisfaction. Whether you gain information about your customers from customer surveys or other sources, having current information on consumer preferences in your area will help you employ the specific sales strategies to sell most effectively.
Remember that replacing a customer is more expensive than keeping a current customer (Hooley et al. 2012). Keep in mind, though, that focusing too much on a customer can yield diminishing returns (Homburg et al. 2012).
The second most emphasized component of MO in our study is competitor orientation. Similar to customer orientation, competitor-oriented activities include collecting and disseminating all available and relevant information related to competitors (Narver and Slater 1990; Tay and Tay 2007). Competitor orientation also involves understanding current and future competitive strengths, weaknesses, capabilities, and strategies, and being aware of competitive reactions to changing and turbulent environments (Narver et al 2000; Slater and Narver 2000a,b; Cambra-Fierro et al. 2011; Tay and Tay 2007).
The real estate business environment is becoming increasingly global and hypercompetitive (Too et al. 2010), so keeping a close eye on a broader set of competitors is crucial. Research shows that agents can compete more effectively by providing innovative marketing/communication and ensuring agents are honest (Meyers and Harmeling 2011). Remember that all activities related to competitor orientation should be conducted in harmony with customer-orientated activities, as both are essential to agent success.
Although the long-term perspectivelong-term perspective component is not emphasized among the companies we study, it is an important component to consider.
Long-term perspective is defined as a company's overriding business objective (Hooley et al. 2012). As real estate professionals work to increase customer satisfaction, positive word-of-mouth (WOM) generated by satisfied customers helps create greater awareness of the agent/company, which can yield new business opportunities. Positive WOM and awareness impact the opportunity for long-term sales growth (Tay and Tay 2007). Meyers and Harmeling (2011) also emphasize that successful real estate firms must make decisions based upon both the short-term goals (pleasing customers today) and long-term goals (pleasing customers tomorrow) to build loyalty.
It is also crucial for long-term survival to develop dynamic capabilities that are hard for competitors to imitate. This could include gaining unique knowledge of a local market and/or engaging in real estate holding arrangements (Too et al. 2010). Additionally, leveraging a long- term perspective also includes understanding competitors' long-term capabilities and strategies (Sorensen 2009).
Inter-functional coordination does not have the emphasis among our Egyptian companies as do the other MO components. Surprisingly, though, Tay and Tay (2007) finds inter-functional coordination is crucial for real estate firms looking to achieve greater market performance (i.e. identifying new opportunities, client satisfaction, etc.).
Leveraging inter-functional abilities can provide great value for clients and the firm. Sharing client feedback with team members and seeing how other successful firms utilize inter-functional teams can help a real estate agency create greater customer satisfaction. Very few studies discuss inter-functional coordination, but it is important to establishing a long-term orientation and generating firm success (Hwang et al. 2013).
Real estate professionals must understand that it is important to focus on each of the four dimensions of Market Orientation. While maintaining a strong focus on customers, it is equally important to focus on competitors, establish a long-term perspective, and ensure internal functions are coordinated. When each works in harmony with the others, real estate professionals can leverage MO components to maximize the potential for positive sales results.
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Appendix - Our Study
The purpose of our study was to examine the extent to which Egyptian firms satisfy customers, how sensitive they are to rivals' reactions, their focus on long-term planning, and the extent to which Egyptian firms rely on inter-functional planning.
Quantitative data were collected from eight firms. A total of 134 usable questionnaires were collected and showed evidence of reliability and validity. Data were interpreted using factor and regression analysis.
Key findings from the study include the identification of the practice of the components of market orientation; customer orientation, competitor orientation, long-term perspective, and inter-functional coordination. The study contains lessons for practitioners and researchers in other countries. Also, it provides managers with insights on the importance of all market orientation components.
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Attia, Samaa Taher (2013), "Market Orientation in an Emerging Economy - Egypt," Journal of Strategic Marketing, 21(3), 277-91.
Cambra-Fierro, Jesus and Yolanda Polo-Redondo (2011), "Post-Satisfaction Factors Affecting the Long-Term Orientation of Supply Relationships," Journal of Business & Industrial Marketing, 26(6), 395-406.
Homburg, Christian, Michael Muller, and Martin Klarmann (2012), "Is the Customer Always King? Finding the Optimum Level of Customer Orientation," Keller Center Research Report, 5(4), 3-9.
Hooley, Graham, Nigel Piercy, and Brigitte Nicoulaud (2012), Marketing Strategy and Competitive Positioning (5th Ed), Essex, England: Prentice Hall.
Hwang, Jiyoung, Jae-Eun Chung, and Byungho Jin (2013), "Culture Matters: The Role of Long-Term Orientation and Market Orientation in Buyer-Supplier Relationships in a Confucian Culture," Asia Pacific Journal of Marketing and Logistics, 25(5), 721-44.
Meyers, Yuvay and Susan Harmeling (2011), "Best Address: The Use of Innovative Marketing in the Real Estate Industry," Journal of Research in Marketing and Entrepreneurship, 13(1), 74-84.
Narver, John and Stanley Slater (1990), "The Effect of a Market Orientation on Business Profitability," Journal of Marketing, October, 20-35.
Narver, John and Stanley Slater, and Douglas L. MacLanchlan (2000), "Total Market Orientation, Business Performance, and Innovation," Working Paper Series, Cambridge, MA: Marketing Science Institute.
Slater, Stanley and John Narver (2000a), "The Positive Effect of a Market Orientation on Business Profitability: A Balanced Replication," Journal of Academy of Marketing Science, 48, 69-73.
Slater, Stanley and John Narver (2000b), "Intelligence Generation and Superior Customer Value," Journal of Academy of Marketing Science, 28(1), 120-27.
Tay, Jasmine and Linda Tay (2007), "Market Orientation and the Property Development Business in Singapore," International Journal of Strategic Property Management, 11(1), 1-16.
Too, Linda, Michael Harvey, and Eric Too (2010), "Globalisation and Corporate Real Estate Strategies," Journal of Corporate Real Estate, 12(4), 234-48.
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About the Author
Samaa Taher Attia, PhD
Associate Professor of Marketing, British University (Egypt)
Dr. Samaa Attia is an Associate Professor of Marketing at the British University in Egypt. Dr. Attia earned her PhD from Aston University in the UK. She also earned her MBA from the Netherlands, where she received distinguished recognition in the form of a fellowship from the Dutch government. Dr. Attia works as an academic, trainer, and consultant at many companies. Dr. Attia has earned several research grants to pursue her passion for research in marketing, particularly in the areas of selling and sales management, strategic marketing, and branding. She is a Fulbright Alumnus and has published articles in several international journals.