Relation of market orientation and profitability:.
Narver and Slater carried out a study to develop a valid measure of market orientation and business profitability. Their hypothesis was "the greater a business's is market orientation, the greater the business's profitability other things being equal-. They did not accept the same form of relationship of various types of businesses i.e. commodity, non-commodity.
The results:.
Their findings supported their hypothesis's that in commodities and non-commodities businesses, market orientation is an important determinant of profitability. .
Among non-commodity businesses, the positive relationship between market orientation and a business's profitability seems to be monotonic.
In commodity businesses, a positive market orientation profitability relationship was found among businesses that were above the median in market orientation. .
The relative cost for both businesses appeared an important determinant of profitability. According to them the market growth was an important determinant of profitability for both types of businesses, but the relationships differ.
In non-commodity businesses, short term market growth presented an opportunity to make profits, however commodities businesses, which are less adaptable in the short term, thus market growth, appears to reduce their profitability.
But commodity businesses that had a high market orientation were able to create superior customer value with powerful wires which to effect a mutually profitably outcome.
4.0 Analysis.
The Nirma story began in 1969 when Mr. K.K. Patel manufactured a phosphate free synthetic detergent powder, which he made available in less than ΒΌ the price of the available products. His product grew in strength and became the largest selling detergent powder in the late 1980s.
Nirma now offers quality products at low price. It has diversified into a number of fields like education, chemicals, and consumer care along with widening its base in the soaps and toiletries section.
