Customer-focus, competitor-focus and marketing performance

N. Gladson Nwokah

N. Gladson Nwokah is a Lecturer in the Department of Marketing, Faculty of Management Sciences, Rivers State University of Science and Technology, Port Hartcourt, Nigeria.

Summary Purpose The purpose of this paper is to assess the inuence of customer focus and competitor focus on marketing performance of food and beverages organizations in Nigeria. Design/methodology/approach The paper adopted an exploratory design- six measures of marketing performance is used to capture the customer-focus and competitive-focus of food and beverages organizations in Nigeria. Data were collected from key informants using a research instrument. Returned instruments were analyzed using regression analysis through the use of statistical package for social sciences (SPSS) version 16. Findings The paper validated the existing instruments for measuring customer focus, competitor focus and marketing performance. The paper also nds a strong positive relationship between the three constructs. Practical implications Two major implications are identied in this paper, one to scholars on the investigation of the link between customer focus, competitor focus and marketing performance in two different organizations. The second is for managers to be aware of the need for effective assessment of marketing performance measure in line with customer focus and competitor focus. This will no doubt help to provide knowledge and understanding of the reason for and consequences of any particular marketing decision. Originality/value The paper signicantly renes the body of knowledge concerning the impact of customer focus, competitor focus and marketing performance in the Nigerian context. Keywords Customer orientation, Competitors, Food industry, Drinks, Sales performance, Nigeria Paper type Research paper

Introduction
Competitive environment of modern day businesses appears to necessitate the successful implementation of marketing, if an organization is to achieve in its chosen market segments. Marketing is regarded as the pivotal behind strategic planning and business operations, and hence, as an intrinsic component of organizational efforts (Appiah-Adu et al., 2001, p. 18). Accordingly, over the last few years, the concept of marketing performance has attracted increased attention among academic researchers and business practitioners (Nwokah and Maclayton, 2006; Eusebio et al., 2006). Marketing makes a fundamental contribution to long-term business success on the bases that an organizations survival depends on its capacity to create value. Therefore evaluating marketing performance is a key task for management (Eusebio et al., 2006). However, businesses that concern themselves with vigorous evaluation of marketing results are in the minority (Ambler, 2000). Customer focus is a central tenet of market orientation. Customer focus is the set of beliefs that put the customers interest rst, which does not exclude those of all other stakeholders such as owners, managers, and employees in order to develop long term protability (Nwokah and Maclayton, 2006; Nwokah, 2008). Deshpande et al. as cited by Nwokah and Maclayton (2006) view customer focus as being part of overall corporate culture whose

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MEASURING BUSINESS EXCELLENCE

VOL. 13 NO. 3 2009, pp. 20-28, Q Emerald Group Publishing Limited, ISSN 1368-3047

DOI 10.1108/13683040910984293

values reinforce and perpetuate this focus. This creation of value is accomplished by increasing benets to the buyers or customer, while decreasing their costs. To develop this level of understanding necessitates acquiring information about the customers and comprehending the nature of economic and political constructs that face them. Despite the theoretical contributions of many scholars on customer focus and competitive focus, it appears that little attention is paid on their inuence on marketing performance (Nwokah and Maclayton, 2006) in Nigeria organizations. Thus, this paper is aimed at assessing the inuence of customer focus, competitor focus, and marketing performance of food and beverages organizations in Nigeria. The next section explores the conceptual foundations of this paper. Conceptual foundations Customer focus. Putting customers at the heart of an organizations product-market denition is the rst role of effective customer orientation management (Nwokah and Maclayton, 2006). Many organizations get into difculties through an inappropriate vision of customers and their needs. Customer focus is critical to business protability, a necessary antecedent of competitive advantage, and a hallmark of successful business (Nwokah and Maclayton, 2006, p. 67). Consequently probing the factors which could facilitate this orientation and how it could be measured in organizations has combined to engage the attention of researcher (Nwankwo, 1995; Nwokah, 2008; Nwokah and Ahiauzu, 2008). Customer focus has been explained in different ways in the literature and often associated with items such as market orientations, marketing concept, and customer rst However, dening its fundamental thought remains the goal of putting customer at the center of strategic focus a plank of the marketing concept (Doyle and Wong, 1998). In Narver and Slater (1990) work, customer orientation is one of the behavioral components of market orientation. Because a marketing concept promotes putting the interest of customers rst, many researchers consider a customer focus to be the most fundamental aspect of corporate culture (Nwokah and Maclayton, 2006). A customer emphasis is most important when buyer power is low and fragmented. When markets are growing, it is important to focus on lead users because they serve as reference points for late adopters (McCole, 2004). Also, when markets are fragmented and buyers power is low, customer needs are less well understood, so a customer emphasis should have a greater impact on performance (Slater and Narver, 1994). In addition, Brooksbank and Taylor (2002) suggest that dynamic markets with shifting mobility barriers, many competitors, are highly segmented and user markets, a customer focus is mandatory. Competitor focus. The need of monitory, understanding and responding to competitors has long been recognized as a signicant aspect of marketing activities yet analysis of the competitive environment seem often to be subordinated as greater emphasis is placed on understanding customers and consumer (Wright et al., 2002, p. 349) However, marketing management has lusts its way by focusing too narrowly on customers to the exclusion of other inuential groups, one of these being competitors. Competitor focus has been dened as those activities by which a company determines and understands its industry, identies and understands its competitors, determines and understands their strength and weaknesses, and anticipates their moves (Wright et al., 2002). Wright et al. (2002) further argue that the keywords are identify/determine, understand and anticipate industry and competitors, but this only denes competitor focus. Competitive focus extends the role to include consideration of competitor responses to customer/consumer needs and perceptions and ones own responses in the strategic decision-making process. Determination of consumers need is the rst step of competitive focus followed by the recognition of competitor strengths and weaknesses, assessment of likely activity and nally the identication of the companys own strengths and weaknesses (Nwokah, 2006). The focus on competitor tends to be on problems associated with the daily protable marketing of a companys products or services. Much earlier Porter (1987) identied that competitive strategy should concern itself with how competitive advantage should be created in each of the businesses in which a company

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competes and from this emerges the notion of critical success factors. These according to the Pareto principle are those few things that must go well if a corporations success is to be ensured (Wright et al., 2002, p. 351). These are typically the 20 percent of the total factors that determines 80 percent of the corporations or business units performance. These therefore, represent those areas that must be given the special attention needed to ensure high performance. Let us now turn to discuss briey, the concept of marketing performance. Marketing performance. In recent years, increased attention has focused on marketing performance in Africa developing nations (Appiah-Adu, 1998). This emerging body of empirical evidence indicates that there is an increase in the performance of marketing activities among both domestic and foreign organizations. The growing academic and practitioner interest in marketing activities in these economics can be attributed to two factors: namely, the changes and market opportunities which the International Monetary Funds (IMF), Structural Adjustment Programmes (SAP) have created in many developing markets; and the renewed organizational involvement in marketing practice in these countries (Appiah-Adu, 1998, p. 436). The purpose of performance measurement is ultimately an improvement in the nancial outcome in a commercial organization. However, measuring nancial outcomes alone does not provide sufcient information of the kind to help direct the decision-making that will achieve the performance improvement (Woodburn, 2004). Organizations need to measure several factors in order to get a real idea of how the organization is performing and where they might intervene. Recently, Ambler and Kokkinaki (1997) have summarized marketing metrics in six categories: nancial, competitive market, consumer behavior, and customer intermediate, direct customer and innovativeness measures. Financial performance measures are hardly obsolete (Woodburn, 2004). They can offer a total performance measurement (Tangen, 2003) by reducing numerous inputs and outputs to the same currency. As long as nancial prots are the goal of most organizations, then decisions need to be validated in nancial terms. Financial evaluations probably have more power to drive change than any other performance measure; even though they are poor indicators of what changes should be made. Woodburn (2004, p. 70) adds that marketing also has an impact as nancial performance through its income generating capacity. Of course, in most situations, nancial assessment will involve income as well as expenditure. Ambler (2000) argues that nancial metrics are usually the rst type to be employed to evaluate marketing performance. The nancial measures include turnover, contribution margin and prot. Competitive market measures dene the extent to which an organization acquire market share over competitors, advertising and promotional share of the market. Nwokah and Maclayton (2006), Nwokah (2008) and Nwokah and Ahiauzu (2008) have used market share as an indicator of business performance in assessing the extent of customer focus on business performance of the food and beverages organizations in Nigeria. They argue that market share is often used to describe the position of an organization within its industrial sector. The implication is usually that the bigger the market share, the more successful the organization. Gray et al. (1998) suggest that market share can be important determinant of protability in the medium to long term. They state that large market share is both a reward for providing better value and a means of realizing lower costs. Consumer behavior measures denes extend an organization penetrates consumers, gain consumer loyalty and have a better customer gain. Customer intermediate measure denes brand recognition, satisfaction and purchase intention. The direct customer measure denes distribution level, protability of intermediaries and service quality. Finally, innovativeness denes the frequency to which an organization launches new products and their revenue achieved thereof. Figure 1 shows the operational conceptual framework for this paper and concludes with hypotheses. It hypothesizes that customer focus have a direct link to marketing performance, and that competitor focus has a direct link to marketing performance. The extent to which these are true is the focus of this paper.

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Figure 1 Operational conceptual framework

Based on the foregoing, we hypothesized thus: H1. H2. Customer-focus is signicantly related to marketing performance food and beverages organizations in Nigeria. Competitor-focus is signicantly related to marketing performance of food and beverages organizations in Nigeria.

The design, methodology and approach adopted in this paper is next discussed.

Methodology
The information discussed in this paper comes from a hand delivery survey that was sent to a sample of 63 randomly selected food and beverages organizations listed on the 2008 edition of Nigerian Stock Exchange Gazette. The choice of Nigeria stock exchange is the fact that companies listed are publicly quoted companies with re-challenging responsibility and performance to their corporate stakeholders including shareholders and customer. The choice of the sample are as follows: these listed organizations are indicative of the most progressive organizations in Nigeria, and have their headquarters located in Lagos, Port Harcourt, and Kano states which represents the three major regions in Nigeria. With the help of ve research assistants 106 copies of questionnaire were distributed to two key informants in 63 organizations (chief executive and marketing executive). There were severe resource constraint of time and nances to attempt to reach a wider and more heterogeneous geographical area. This exploratory survey instrument was used to examine as many issues related to customer focus, competitor focus and marketing performance. In the customer focus and competitors focus, a ve point Likert-scale anchored with (strongly disagree to strongly agree) was used. A ve-point Likert scale was also used for the measurement of marketing performance. Of the nal sample 29 percent was made up of organizations with income of N85 million and the rest are organizations with income less than N85 million. A total of 79 useable surveys were returned, yielding an impressive response rate of 74 percent. Owing to the nature of the survey instruments, the data analyses involved simple summary statistics and t-test, using the SPSS version 16. The question items were also tested for non-response bias. None were found. Reliability analysis After the survey had been completed the reliability of the instrument was further examined by computing their coefcient alpha (Cronbach Alpha). All scales were found to exceed a minimum threshold of 0.7 as used in previous studies (Seeman and OHara, 2006).

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Convergent validity is also suggested by the high Cronbach alpha attained when the individual variable scores are combined into a single scale to give a Cronbach alpha of 0.7397. The actual results of the scale reliability analysis are reported in Table I In the next section, we show the results and discuss the ndings received from survey instrument about marketing metrics. This section ends with the test of hypotheses on the relationship between customer focus, competitive focus and marketing performance metrics.

Findings and discussion

Descriptive analysis of the measurement of marketing performance for tourism and hospitality organizations and for industrial organizations In addressing this topic, respondents were asked to specify their degree of satisfaction with their measures of marketing performance metrics. Table II shows that the organizations are satised with measures used. This is in contradiction to Eusebio et al. (2006) whose result shows that managers were not satised with the measures used regardless of the type of measure used. Importance of performance metric Table III shows the mean values and the signicance of the t-test for assessing the metric for marketing performance measure which are more important for the organizations. The ndings show that there is statistical signicance difference for all the measures. The results in Table III show that food and beverages organizations in Nigeria see the entire Table I Scale reliability of market orientation elements
S/NO A 1 2 3 4 5 6 7 8 B 9 10 11 12 13 14 Scale items Customer focus (Coefcient alpha for scale 0.7419) We encourage customer comment and complaints because they help us do a better job We have a strong commitment to our customers We are always looking at ways to create customer value in our product We measure customer satisfaction on a regular basis After-sales strategies are an important part of our business strategy We dene quality as the extent to which our customers are satised with our products Our rm would be better off if the sales force worked a bit harder Customer satisfaction is assessed at least once every three months Competitor focus (Coefcient alpha for scale 0.7223) We regularly monitor our competitors marketing efforts We regularly collect marketing data on our competitors to help direct our marketing plans Our sales people are instructed to monitor and report on Competitors activities We respond rapidly to competitors, actions Our top managers often discuss competitors actions We consider opportunities based on competitive advantage Item to total correlation Scale alpha if item deleted

0.4005 0.4686 0.4019 0.4345 0.4468 0.4356 0.4490 0.4596 0.3900 0.4690 0.4935 0.4187 0.4854 0.4740

0.7720 0.7097 0.7225 0.7156 0.7134 0.7144 0.7130 0.7122 0.7036 0.7814 0.7724 0.7953 0.7717 0.7797

Table II Extent of satisfaction with measures for marketing performance

Mean , 20 million 20-60 million 60-80 million Total Industrial organizations Note: * p , 0.05 4.225 4.500 4.088 4.100 4.138 4.263 4.225 4.350 Standard deviation 0.121 0.118 0.125 0.123 0.128 0.128 0.127 0.139 t-test 1.728* 1.621 1.611 1.877*

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Table III importance of metric categories for assessing performance

Measures Financial Competitive market Consumer behavior Consumer intermediate Direct customer Innovativeness Note: * p , 0.05 Mean 4.350 4.225 4.150 4.075 4.000 3.950 3.725 3.600 4.120 3.912 4.411 4.001 Standard deviation 0.139 0.127 0.146 0.126 0.129 0.152 0.186 0.182 0.121 0.119 0.131 0.129 t-test 2.112* 2.111* 2.131* 2.344* 2.246* 2.221*

metrics of the measures of marketing performance as important. The degree of importance in innovativeness is 4.411. The lowest seen to be consumer intermediate with a mean of 3.725.

Relationship between customer focus, competitive focus and marketing performance In order to assess the relationship existing between customer focus, competitive focus and marketing performance, a regression analysis was carried out to obtain the coefcient of determination (R 2) and the F-value. Table IV shows that the regression models are statistically signicant supporting the view of Eusebio et al. (2006). Results in Table IV show that marketing performance is positively inuenced by customer focus and competitive focus. The table reveals that customer focus coefcient have statistical signicance in the importance of nancial measures (0.776), consumer behavior measures (0.786), consumer intermediate measure (0.869), Direct customer measures (0.603) and Innovativeness (0.737), Also, the importance of marketing performance measure is highly positively signicance. This is evident in the positive effect or relationship between the degree of competitor focus and marketing performance measure. This positive relationship may also be connected with the present economic reform of Nigeria. One of the emphases of this reform agenda is to de license any business (either private or government) that does not seem to satisfy the desire of the customers and greet harmonious relationship with the host communities particularly at the Niger Delta area of the country.

Table IV Regression analysis of the relationship between the importance of customer focus and competitor focus and marketing performance of food and beverages organization
Measures Financial Competitive market Consumer behavior Consumer intermediate Direct customer Innovativeness F-value 69.246*** 87.648*** 93.585*** 178.696*** 33.097*** 68.909*** R2 0.536 0.602 0.611 0.755 0.352 0.543 C1 standardized b 0.738* 0.776** 0.786*** 0.869*** 0.603** 0.737* C2 standardized b 0.763* 0.805* 0.844* 0.854*** 0.711* 0.762**

Notes: * p,0.1; ** p , 0.05; *** p , 0.01; C1-customer focus C2- competitive focus

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Conclusions
The survey results suggests that a valid instrument for assessing marketing performance in Nigeria can be developed based on the most robust elements of Ambler and Kokkinaki (1997). The survey results also show that a valid instrument for measuring the customer focus and competitive focus can also be developed on the most robust elements of the Narver and Slater (1990) scales. Given the relationship between customer focus, competitor focus and marketing performance, this suggests that the puried scales developed in this paper could be used as a check list to pinpoint areas of weakness which may be corrected if companies are to improve their marketing performance. Customer focus includes the active encouragement of customer comments and complaints, an after-sales service emphasis, regular evaluation of ways to create superior product/service value and the regular measurement of customer satisfaction level. Competitors focus includes regular monitory of competitors marketing efforts, regular collection of marketing plans, sales people interest to monitor and report competitor actions. The major conclusion of this paper is that customer focus and competitor focus lead to marketing performance of food and beverages organization in Nigeria. Based on the ndings of this paper, we propose that customer focus and competitor focus leads to marketing performance (see Figure 2).

Implications of the paper

The implication of this paper is clear for scholars and managers. For scholars this paper has implications on the investigation of customer focus, competitive focus and marketing performance of food and beverages organizations. It provides a direct test of the Western paradigm in Nigeria economic systems different from the USA. For managers, this paper indicates that managers have to be aware of the need for effective assessment of marketing performance measurement which help to provide knowledge and understanding of the reason for and consequences of any particular marketing decision. This should be made in line with customer focus and competitor focus. Figure 2 shows the direct relationship existing between customer focus, competitor-focus and marketing performance of food and beverages organizations. The gures on the model show the degree of their relationship. Figure 2 Relationship between C1 and C2 and marketing performance

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Recommendations
This paper has sought to contribute to knowledge concerning customer focus, competitor focus and marketing performance by applying the established customer focus and competitor focus model to food and beverages organizations in Nigeria under somewhat unique circumstances. However, in furtherance to the realization of set objectives, we make the following recommendations:
B

Management should regularly measure the customer satisfaction level, customer loyalty, new customer gained, customer retained or customer lost. Managers should give consumer metrics priority in the way it assesses its marketing performance. Management should always be careful and vigilant to the activities of the competitors.

Suggestions for further study

This paper adopted an exploratory and subjective rather than an objective or triangulation measurement, therefore, future research may consider an objective measurement or triangulate the subjective and objective measurement to assess the validity that customer focus, competitor focus lead to marketing performance.

References
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Nwokah, N.G. and Maclayton, D.W. (2006), Customer focus and business performance: the study of food and beverages organizations in Nigeria, Measuring Business Excellence, The Journal of Organizational Performance Management, Vol. 10 No. 4, pp. 65-75. Porter, M. (1987), Competitive Strategy, Free Press, New York, NY. Seeman, E.D. and OHara, M. (2006), Customer relationship management in higher education, using information systems to improve the student-school relationship, Campus-Wide Information Systems, Vol. 23 No. 1, pp. 24-34. Slater, S.F. and Narver, J.C. (1994), Does competitive environment moderate the market orientation performance relationship?, Journal of Marketing, Vol. 58 No. 1, pp. 46-55. Tangen, S. (2003), An overview of frequently used performance measures, Work Study, Vol. 52 No. 7, pp. 347-54. Woodburn, D. (2004), Engaging marketing performance measurement, Measuring Business Excellence, the Journal of Organizational Performance Management, Vol. 8 No. 4, pp. 63-72. Wright, S., Pickton, D.W. and Calliw, J. (2002), Competitive Intelligence in UK rms; a typology, Marketing Intelligence & Planning, Vol. 20 No. 6, pp. 349-60.

About the author

N. Gladson Nwokah holds a PhD in marketing from Rivers State University of Science and Technology, Port Harcourt, Nigeria. He is at present a lecturer in the Department of Marketing, Faculty of Management Sciences, Rivers State University of Science and Technology, Nigeria. He has published in Measuring Business Excellence, European Journal of Marketing, Corporate Governance: The International Journal of Business in Society, Journal of Management Development, African Journal of Marketing Management, Acta Commercii and more others. He has had his papers accepted for publication in Marketing Intelligence & Planning and again in Corporate Governance. N. Gladson Nwokah can be contacted at: juglad@yahoo.co.uk

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