Executive Insights:

Market Orientation of Mexican Companies

This study suggests that companies from a sample in an indus- ABSTRACT

trialized region in northern Mexico are confident about their
level of overall market orientation but that differences in their
customer and competitor orientation exist. The authors test
market orientation for its relationship to several other variables,
such as company size, type of product, and use of a marketing
plan, and they discuss the implications for marketing theory
and practice.

During the past century, extensive protectionism and wide-

spread nationalization of productive organizations severely Reto Felix and
impeded the development of Latin American consumer mar- Wolfgang Hinck
kets, resulting in reduced competitiveness and general eco-
nomic stagnation. This unfavorable development peaked
during the 1970s and the 1980s and led to labels such as the
“lost decade” or even the “lost quarter-century” (Enderlyn
and Dziggel 1994; Nevaer 1995; Tuller 1993). Among the first
Latin American countries to become more free-market ori-
ented was Mexico, the largest Spanish-speaking country in
the world. After undergoing drastic reforms that resulted in
the 1993 ratification of the North American Free Trade
Agreement and, more recently, in the unrivaled and exclu-
sive EU–Mexico Free Trade Agreement with the European
Union, Mexico moved into a position with exceptional
potential for both domestic and foreign firms. Consequently,
a large number of subsidiaries of U.S. and other international
firms began serving an increasingly stable Mexican domestic
market, which also developed its own global players, such as
the world’s third-largest cement producer CEMEX and the
multinational glass manufacturer Vitro, which is also one of
the world’s leading companies in its industry. The economy’s
move toward a market-driven approach was further strength-
ened by the 2000 election of Vicente Fox as the president of
Mexico. Before entering politics, Fox had been president of
Coca-Cola’s Latin America operations.

Although the move of Mexican officials and firms toward a

greater market focus is well documented through anecdotal
evidence, and despite Mexico’s development and impor- Submitted December 2003
Accepted October 2004
tance as a trading partner of the United States and Canada,
© Journal of International Marketing
researchers have made little effort to investigate rigorously Vol. 13, No. 1, 2005, pp. 111–127
the market orientation of Mexican firms, even though the ISSN 1069-031X

Market Orientation of Mexican Companies 111

 construct of market orientation has been a major research
focus in the marketing literature for more than a decade.
Instead, the majority of the research investigating the level of
market orientation and its relationship with other variables,
such as performance measures and organizational learning,
is concentrated on the United States and other selected
developed countries. Developing or emerging countries,
such as Mexico, are typically not the focus of the studies, and
thus little is known about the market orientation of firms in
such countries.

Because of the importance of Mexico and its firms and

because an understanding of strategies and performance can
provide insights into the contemporary global environment
(Aulakh, Kotabe, and Teegen 2000), this article addresses the
questions of what constitutes the market orientation of Mex-
ican firms and of how Mexican companies are market ori-
ented along the main dimensions of the market orientation
construct. By investigating the customer and competitor ori-
entations of Mexican companies and the areas in which they
perceive themselves as strong or weak, we draw conclusions
about the competitive situation of the firms and about com-
petitive responses, consulting needs, and policy implica-
tions. The conclusions can provide U.S. managers and deci-
sion makers with a greater understanding of Mexican firms’
market orientation.

Scholars have defined the term “market orientation” as the

MARKET ORIENTATION implementation (Kohli and Jaworski 1990) or the measure
(Barksdale and Darden 1971) of the marketing concept.
Conceptual Considerations Whereas the marketing concept represents a kind of business
philosophy (Houston 1986; Hunt and Lambe 2000), market
orientation addresses the operationalization of this concept.
Thus, Kohli and Jaworski (1990, p. 6) define market orienta-
tion as “the organizationwide generation of market intelli-
gence pertaining to current and future customer needs, dis-
semination of the intelligence across departments, and
organizationwide responsiveness to it.” The responsiveness
component consists of response design (i.e., using market
intelligence to develop plans) and response implementation
(i.e., executing such plans) (Jaworski and Kohli 1993). The
20-item scale MARKOR measures the four components of
market orientation (Jaworski and Kohli 1993; Kohli,
Jaworski, and Kumar 1993).

Another scale that assesses operationalization measures (1)

customer orientation, (2) competitor orientation, and (3)
interfunctional coordination (Narver and Slater 1990). On
the basis of Narver and Slater’s (1990) scale, Deng and Dart
(1994) develop a four-factor, 25-item scale, but their work
does not add much value to the original study.

112 Reto Felix and Wolfgang Hinck

Finally, Hunt and Morgan (1995, p. 11) propose the follow-
ing definition of market orientation that integrates the previ-
ous research: “[A] market orientation is (1) the systematic
gathering of information on customers and competitors, both
present and potential, (2) the systematic analysis of the infor-
mation for the purpose of developing market knowledge, and
(3) the systematic use of such knowledge to guide strategy
recognition, understanding, creation, selection, implementa-
tion, and modification.” However, Hunt and Morgan do not
develop a scale to operationalize their proposed definition.

In empirical studies, market orientation is related primarily

to performance measures. Typically, the main hypothesis in Results of Previous Studies
the studies is that market orientation has a positive impact
on company performance (e.g., measured by market share or
return on investment). Slater and Narver (2000) find a posi-
tive, significant relationship between market orientation and
business profitability in multibusiness corporations. Gainer
and Padanyi (2002) report a positive impact of market orien-
tation on customer satisfaction, peer reputation, and
resource attraction for nonprofit organizations in two large
Canadian cities. Noble, Sinha, and Kumar (2002) find that
only competitor orientation is significantly related to busi-
ness performance.

Several studies also introduce mediating or moderating vari-

ables to shed more light on the hypothesized relationship.
Han, Kim, and Srivastava (1998) integrate innovation as a
mediator into their model and demonstrate that market ori-
entation contributes significantly to superior performance by
facilitating both technical and administrative innovations.
However, Slater and Narver (1994) find limited support for
the moderator roles of competitive environment factors (e.g.,
market growth, buying power, competitor concentration,
competitor hostility) on the market orientation–performance
relationship. Matsuno and Mentzer (2000) include three
strategy types (defenders, prospectors, and analyzers) in
their model and demonstrate that the strategies significantly
moderate the impact of market orientation on four measures
of a firm’s performance (market share, relative sales growth,
percentage of new product sales to total sales, and return on
investment). Matsuno, Mentzer, and Özsomer (2002) study
the effects of entrepreneurial proclivity and market orienta-
tion on business performance and suggest that entrepreneur-
ial proclivity’s influence on performance is positive when
market orientation mediates it but is negative or nonsignifi-
cant when market orientation does not mediate it.

Homburg and Pflesser (2000) develop a multiple-layered

model of market-oriented organizational culture that distin-
guishes among values that support market orientation, norms

Market Orientation of Mexican Companies 113

 for market orientation, artifacts indicating high and low mar-
ket orientation, and market-oriented behaviors. According to
their results, artifacts are highly important for guiding
market-oriented behaviors, but values and norms show only
indirect impacts on market-oriented behavior. Because val-
ues and norms are effective only when they are supported by
adequate artifacts, the authors encourage managers to assign
some of their resources to symbolic management, which uses
symbols to communicate the underlying values and norms.
Hult and Ketchen (2001) design a higher-order construct
(positional advantage), which they form from four first-order
indicators (market orientation, entrepreneurship, innova-
tiveness, and organizational learning), and they find that
positional advantage has a direct, positive, and significant
impact on all performance measures (five-year average
change in return on investment, five-year percentage change
in income, and five-year percentage change in stock price).
Market orientation, which they measure with Narver and
Slater’s (1990) scale, has the greatest explanatory power on
positional advantage. Finally, Siguaw, Brown, and Widing
(1994) study the influence of a firm’s market orientation on
salespeople’s characteristics and find that in companies with
a high market orientation, the sales force scores higher on
customer orientation, has reduced role stress, and expresses
greater job satisfaction and organizational commitment.

Market orientation studies have also focused on foreign mar-

kets, particularly in the Asian–Pacific region and in Europe
(e.g., Bhuian 1998 [Saudi Arabia]; Deshpandé and Farley
1999 [India and Japan]; Fritz 1996 [Germany]; Gounaris and
Avlonitis 2001 [Greece]; Hooley et al. 2000 [Hungary, Poland,
and Slovania]; Liu 1995 [United Kingdom]; Subramanian
and Gopalakrishna 2001 [India]; Vázquez, Santos, and
Álvarez 2001 [Spain]). The results are essentially similar to
those of domestic studies, with encouraging evidence of the
positive effect of market orientation on business performance
as well as with an indication that the degrees of foreign
firms’ market orientation may differ from those of U.S. and
Canadian firms.

Because of the importance of Mexico to the United States

and on the basis of the previous discussion, we are interested
in the level of market orientation in Mexican companies. By
investigating what constitutes the market orientation of Mex-
ican firms, we hope to provide managers and decision mak-
ers with information that will lead to a better understanding
of the business practices of Mexican firms. We have found
only one previous study that addresses market orientation in
Mexico. On the basis of a convenience sample of small firms,
Godkin and colleagues (2002) report that firms that recognize
that they have problems with their market orientation also

114 Reto Felix and Wolfgang Hinck

report that they have problems obtaining general business
and/or marketing advice.

To increase the relevance of our study to scholars and practi-

tioners of international marketing, we are less interested in
the effect of market orientation on variables such as business
performance or strategic orientation, both of which previous
authors have sufficiently addressed, and are more interested
in the specific internal market structure of firms in Mexico.
Therefore, we also test for differences in company size and
the type of product (durable or perishable) the company
manufactures. On the basis of previous research, we have
some expectations about the relationships. For example, we
expect that larger companies are higher on market orienta-
tion than smaller companies. Typically, larger companies
have more resources (e.g., human resources, access to market
research) than smaller firms, and they often have the neces-
sary infrastructure (e.g., formalized marketing departments,
communication channels) to pursue a market orientation.

It is more difficult to formulate expectations about the type

of product. Empirical studies have distinguished only
between industrial and consumer goods. In the current
study, we further divide consumer products into durables
and perishables. We do not expect significant differences
between the two subgroups, but we investigate this issue for
further clarification.

We translated the original 44-item questionnaire for market

orientation developed by Gray and colleagues (1998) into METHOD
Spanish and then back-translated it into English. Following
the work of Sperber and Devellis (1994), we compared the Research Design
original version with the back-translated English version on
a seven-point Likert scale in accordance with two criteria,
comparability of language and similarity of interpretability.
We did not need to make any major changes. We measured
items on seven-point Likert scales, and a pilot study with six
marketing executives suggested that the instrument was
understood and had content validity.

The basis for the sample was a list of registered companies

from the Mexican Entrepreneurial Information System (Sis-
tema de Información Empresarial Mexicano). The Mexican
Ministry of Economics supports this list, which constitutes
what is perhaps the most reliable and comprehensive reg-
istry of companies available. To control for regional differ-
ences, we included only companies from the city of Monter-
rey and its surrounding areas in the sample. Because many
smaller companies in Mexico do not pursue any formal mar-
keting activities, we decided to include only medium-sized
and large firms.1 Finally, we decided to focus on producers

Market Orientation of Mexican Companies 115

 of consumer products, because we were interested in
whether our assumption that there is no difference between
producers of consumer durables and producers of consumer
perishables would hold. After we compiled the list in accor-
dance with the three criteria (region, company size, and type
of product), 185 companies remained. Of the 185 firms, we
randomly chose 123 and contacted them by telephone. Of
the 123 contacted firms, 51 agreed to participate in the study.
The questionnaires were then administered personally to the
marketing director or, when the marketing director was
unavailable, to his or her representative. We intended the
personal administration of the interviews to enhance trust
and diminish fears that competitors could obtain the data.
Because the personal nature of the interview allowed for
immediate clarification of questions or problems, all 51 cases
are complete (i.e., there are no missing data).

Of the 51 participating companies, 29 are medium sized, and

Sample Characteristics 22 are large; 25 firms produce durable consumer products,
and 26 firms concentrate on the production of consumer per-
ishables. On average, firms’ marketing departments have
existed for approximately 13.76 years, with a standard devia-
tion of 13.97 and a range of 61 years. The average number of
employees in the marketing department is 2.04, with a stan-
dard deviation of 1.34.

On average, advertising is the most important marketing

function, followed by promotions, new product develop-
ment, competitor analysis, and market research. Somewhat
less important are the functions of consumer analysis, sales
forecasting, sales, and public relations. The low importance
of other functions indicates that with the previous nine
options, we were able to cover the most important marketing
functions in the questionnaire.

Of the firms, 43 have an assigned marketing budget, and 8 do

not. In addition, 40 companies use a defined marketing plan,
and 11 companies do not. For the companies that use a mar-
keting plan, on average, they revise the plan every 21 weeks,
with a maximum of one revision every week and a minimum
of one revision every year. Given that all companies in the
sample are at least medium-sized companies, it is notable
that more than 15% do not have an assigned marketing
budget, and more than 20% do not have a defined marketing
plan. However, all 8 companies that do not have an assigned
marketing budget and 10 of the 11 companies that do not
have a defined marketing plan are medium-sized companies.
We summarize the sample characteristics in Tables 1 and 2.

When Mexican companies were exposed to the components

RESULTS of market orientation, they perceived themselves to be espe-
cially strong in terms of profit orientation, customer orienta-

116 Reto Felix and Wolfgang Hinck

 Company Size (SIZE)
Medium Large
29 22
Type of Consumer Product (TYPE)
Durable Perishable
25 26
Existence of the Marketing Department (Years) (EXDEP)
n Minimum Maximum Mean Standard Deviation Skewness Kurtosis
51 1 62 13.76 13.97 1.87 3.14
Number of People Working in the Marketing Department (PERSONS)
n Minimum Maximum Mean Standard Deviation Skewness Kurtosis
51 1 5 2.04 1.34 1.12 .05
Importance of Marketing Functionsa (IMPOR)
New Product Competitor Consumer Market
Public Relations Advertising Promotions Sales Forecast Development Analysis Analysis Research Sales Other
6 1 2 4.00 2.00 2.00 3.00 2 5 7
Assigned Marketing Budget (BUDGET)
Yes No
43 8
Defined Marketing Plan (PLAN)
Yes No

Market Orientation of Mexican Companies

40 11
Revision of Marketing Plan Every (Weeks)b (REVIS)
n Minimum Maximum Mean Standard Deviation Skewness Kurtosis
40 1 52 21.25 20.34 .73 –1.24
aOrdinal scale: 1 = “most important,” 7 = “least important.”
bOnly for companies that have a marketing plan.
Table 1.
Characteristics of Companies

117
 Assigned Defined
Table 2. Marketing Budget Marketing Plan
Cross-Tabulation of Company Yes No Yes No
Size with Marketing Budget Company Size
and Marketing Plan Medium 21 8 19 10
Large 22 0 21 1

tion, and response implementation (see Table 3). The compa-

nies perceived interfunctional coordination, intelligence dis-
semination, and competitor orientation to be on a somewhat
lower level, and they perceived themselves to be less
advanced with regard to the response-design factor. Overall,
the companies in the sample viewed themselves as market
oriented. However, when we consider the strong scores, it is
difficult to establish whether the results reflect the real situa-
tion or whether they are a systematic measurement error that
Mexican managers caused by being too optimistic. Neverthe-
less, even in the case of a systematic measurement bias, the
relative differences for the seven components are still impor-
tant. Furthermore, the perceived absolute values may be
important for some third parties. For example, given the pos-
itive self-evaluation of their potential clients, consulting
companies searching for business opportunities in Mexico
with medium-sized and large companies may find it difficult
to identify consulting needs in the market. In such cases,
business propositions with regard to performance results
could serve as a better entry strategy than merely the sugges-
tion that consumer orientation could be improved by
employing consulting services.

To learn more about the importance of general Mexican firm

characteristics, we regressed market orientation on company

Stan-
Table 3. dard
Market Orientation: Mini- Maxi- Devi- Skew- Kur-
mum mum Range Mean ation ness tosis
Descriptive Statistics
Customer
orientation 3.43 7.00 3.57 6.05 .93 –1.13 .67
Competitor
orientation 2.50 7.00 4.50 5.35 1.18 –.64 –.34
Interfunctional
coordination 2.83 7.00 4.17 5.45 1.07 –.49 –.30
Profit
orientation 4.25 7.00 2.75 6.19 .82 –1.07 .39
Intelligence
dissemination 3.00 7.00 4.00 5.39 1.20 –.09 –1.18
Response
design 2.20 7.00 4.80 4.92 1.23 –.21 –.51
Response
implemen-
tation 1.00 7.00 6.00 5.85 1.28 –1.62 3.27
Total scale 3.78 6.88 3.10 5.60 .76 –.29 –.28

118 Reto Felix and Wolfgang Hinck

size (SIZE), the type of consumer product (TYPE), the num-
ber of years for which the marketing department had existed
(EXDEP), the number of people working in the marketing
department (PERSONS), whether the company had an
assigned marketing budget (BUDGET), and whether the com-
pany had a defined marketing plan (PLAN). The results show
that only the existence of a defined marketing plan had a sig-
nificant influence on the market orientation of Mexican
firms. The companies that did not have a defined marketing
plan scored, on average, .846 points lower on the overall
market orientation scale. We provide a summary of the
results in Table 4.

Because several authors have emphasized the significance of

customers and competitors for business success (e.g., Day
and Wensley 1988; Narver and Slater 1990; Porter 1980) and
because the two factors also appear to be particularly impor-
tant to U.S. firms interested in the Mexican market, we
focused on investigating the specific customer orientation
and competitor orientation of Mexican firms. More precisely,
we were interested in whether company size and the type
of product had an influence on the outcome for the two
constructs. In addition, to enhance practitioner value, we
wanted to classify companies in accordance with the four-
cell market orientation matrix that Heiens (2000) proposes.
As we mentioned previously, Mexican companies view
themselves as strong on customer orientation and somewhat
weaker on competitor orientation. To determine whether the
differences in the scores were significant, we used a paired-
sample t-test for the comparison of means. The difference, as
well as the correlation, is significant (see Table 5).

Coefficient Unstandardized Standardized (β) t p

Constant 6.627 22.321 .000
Table 4.
PLAN –.846 –.463 –3.656 .001
Market Orientation (Total
Scale): Multiple Regression
SIZEa .116 .908
TYPEa .284 .778
EXDEPa .871 .388
PERSONSa .344 .732
BUDGETa –1.244 .220
Model Fit R R2 Adjusted R2
.463 .214 .198
aExcluded from the model.

Mean Standard
n Difference Deviation t p Correlation p Table 5.
51 .70 1.09 4.559 .000 .47 .000 Paired Sample t-Test: Customer
Orientation and Competitor
Orientation

Market Orientation of Mexican Companies 119

 On the basis of the results, we could investigate the impact of
company size and the type of product on Mexican firms’ cus-
tomer and competitor orientation. There is no evidence that
suggests that producers of consumer durables are different
from producers of consumer perishables in their consumer
and competitor orientations (see Table 6).

Therefore, to gain a better visual understanding of market

orientation in Mexico, we used the market orientation matrix
that Heiens (2000) suggests to classify Mexican companies
according to their customer and competitor orientations. The
matrix contains four areas: First, customer-preoccupied com-
panies are companies with relatively low competitor orienta-
tion but high customer orientation; their focus is on what the
customer wants regardless of what the competition is doing.
Second, market warriors are firms with the opposite profile;
they have high competitor orientation and low customer ori-
entation. They may engage in some type of competitive war-
fare, with the idea that what counts is their relative advan-
tage to the competition, not the absolute benefit in terms of
customer value. The logic behind this position is that no
matter how good or bad a firm’s products and services are, as
long as they are better than those of competitors, customers
will continue to buy from the firm. This position should
work better in local markets than in global markets, as well
as in markets with high entry barriers for competitors and
few alternative choices for customers. Third, strategically
integrated companies score high on both customer orienta-
tion and competitor orientation; however, the simultaneous
monitoring of both customers and competitors may be
resource intensive and thus can have a negative impact on
profit. Fourth, strategically inept firms have low customer
and competitor orientations; even when these firms have

Mean
Table 6. n Mean Difference t p
One-Way Analysis of Variance: Customer Orientation
Market Orientation (Customer Company Size
Orientation and Competitor Medium 29 5.89
Orientation) Large 22 6.26 –.37 –1.492 .140
Type of Product
Durables 25 5.98
Perishables 26 6.12 –.14 –.505 .620
Competitor Orientation
Company Size
Medium 29 4.96
Large 22 5.87 –.91 –3.120 .003
Type of Product
Durables 25 5.28
Perishables 26 5.42 –.14 –.428 .670

120 Reto Felix and Wolfgang Hinck

other advantages, such as efficient internal operations or
technological competency, it is difficult for them to survive.

Figure 1 shows the two-dimensional matrix of the customer

and competitor orientations for the 51 Mexican companies in
the sample. For illustrative purposes, we divided both
dimensions at the scale median, that is, at the value of 4 (ver-
tical and horizontal lines in Figure 1). As Figure 1 demon-
strates, most Mexican marketing managers perceive their
companies as strategically integrated. There is one company
in the marketing-warriors area, one company in the strategi-
cally inept area, and four companies in the customer-
preoccupied area. All are medium-sized firms. The diagonal
line from the origin at the lower-left-hand corner to the
upper-right-hand corner indicates data points in which cus-
tomer orientation and competitor orientation are equal. Com-
panies above the line have higher competitor orientation
than customer orientation, and companies below the line
have lower competitor orientation than customer orienta-
tion. Thus, most Mexican companies in the sample have
lower competitor orientation than customer orientation,
apparently independent of company size.

We also constructed an indicator that integrates the customer

and competitor score into one variable (called “external

Figure 1.
8 Customer and Competitor
Marketing warriors Strategically integrated Orientation Matrix
7

6
Competitor Orientation

Strategically inept Customer preoccupied

0
0 1 2 3 4 5 6 7 8
Customer Orientation

Medium companies Large companies

Market Orientation of Mexican Companies 121

 focus”). We used the unweighted mean of the two constructs,
which is exemplified by the three lines going from the upper-
left-hand corner to the lower-right-hand corner in Figure 1.
Because of the additive (as opposed to multiplicative) nature
of this new variable, the three lines in Figure 1 show a linear
substitutional relationship between Mexican firms’ customer
and competitor orientations. According to this definition, all
companies that are on the same line are equal in their com-
bined orientation to customers and competitors. For exam-
ple, a company that scores 6.3 on customer orientation and
5.5 on competitor orientation will be on the same line as a
company that scores 5.8 on customer orientation and 6.0 on
competitor orientation. Notably, all Mexican companies that
are below the first external focus line are medium-sized com-
panies. Figure 1 suggests that medium-sized Mexican com-
panies are lower in external focus than are large companies.

In this study, we measured Mexican market orientation on a

SUMMARY AND DISCUSSION 32-item scale and sampled medium-sized and large produc-
ers of consumer products in the northern region of Mexico.
The personal administration of the questionnaire resulted in
a relatively small sample size, but statistical analyses show
that the data are valid. Whereas most previous studies focus
on the relationship between market orientation and some
type of performance measure, we are more interested in the
internal market structure of Mexican firms and their classifi-
cation with respect to customer and competitor orientation.
Nevertheless, factors such as company size (measured by the
number of employees), the type of product, the existence of
marketing budgets and plans, and so forth, are still
considered.

The findings of this study suggest that the assignment of a

marketing budget and the use of a defined marketing plan are
still not common among all companies in Mexico. This is
true especially for medium-sized companies, whereas large
companies seem to use the instruments regularly. However,
the existence of a defined marketing plan appears to be sig-
nificantly related to market orientation.

Furthermore, Mexican companies perceive themselves to be

especially strong with respect to profit orientation, customer
orientation, and response implementation. Overall, compa-
nies seem to be relatively optimistic about their level of mar-
ket orientation. However, it must be kept in mind that the
companies in the sample are among the biggest and most
advanced in Mexico, and the region around Monterrey is
known for its high level of industrialization and its access to
global markets. The results of the study might be signifi-
cantly different for a sample of companies in the southern
region of Mexico.

122 Reto Felix and Wolfgang Hinck

In addition, large Mexican companies score significantly
higher on competitor orientation than medium-sized compa-
nies do. This result could be attributed to resource availabil-
ity, but it could also be due to the family-owned nature of
most medium-sized companies, and therefore they may sim-
ply be subject to other corporate decision-making processes.
This is an area that researchers should investigate further.

Overall, the results of this study provide scholars, managers,

and decision makers with a first impression of how compa-
nies in the developed areas of Mexico view market orienta-
tion and their company in the context of market orientation.
The results suggest that large Mexican companies have
some advantages over medium-sized companies. However,
medium-sized companies, though generally equipped with
fewer resources, have a higher degree of flexibility and there-
fore can serve customers equally well as large firms. How-
ever, as we mentioned previously, monitoring competitors
requires resources that most likely cannot be substituted
with other factors, such as higher flexibility or more direct
and informal communication channels. The findings that
large firms are more competitor oriented than medium-sized
companies are consistent with these considerations.

For marketing practitioners who are interested in the Mexi-

can market, resource allocation is perhaps the most impor-
tant issue that arises from this study. Under the constraints of
the Mexican economy, resource allocation is still more
important than it is for most Western firms, and the correct
decisions are essential for the long-term survival of Mexican
companies, which face not only their traditional competitors
from developed countries but also fierce competition from
developing countries with even lower incomes and produc-
tion costs (in both Latin America and Asia). Especially
important is the question whether investment dollars (or
pesos) will go toward the monitoring of customers or com-
petitors. A trade-off between the two objectives is usually
unavoidable, and companies must react quickly to adjust to
ever-changing market environments. With the globalization
of Mexican markets, new competitors may emerge suddenly,
and a strategy directed toward customer orientation that
worked well in the past may be insufficient in the future.
However, a market orientation is not the only viable strategic
orientation for companies to choose. Examples of successful
companies demonstrate that a production orientation (based
on production efficiency, cost minimization, and mass distri-
bution) or a selling orientation (based on aggressive sales and
advertising methods) may be equally feasible to achieve
higher business performance (e.g., Noble, Sinha, and Kumar
2002).

Market Orientation of Mexican Companies 123

 Some of the main limitations of this study have already been
LIMITATIONS AND FUTURE mentioned in the previous sections. First, a larger sample
RESEARCH size would improve the generalizability of the study. Never-
theless, the quality of the data compensated well for the
smaller sample. Second, with regard to company size,
Schlegelmilch and Ram (2000) find company size to be cor-
related to strategic market orientation; therefore, by using
company size as a covariate, they hold it constant when
investigating the relationship between market orientation
and other constructs. When this correlation is confirmed in
the Mexican context as well, using company size as a covari-
ate might be a good way to obtain further insight into the
more fundamental predictors of market orientation.

We also note that companies in the current sample are only

from the relatively developed region in northern Mexico
around the industrial city of Monterrey. A comparison with
companies in other parts of the country could lead to valu-
able insights into market orientation on a national rather
than regional level. Another methodological issue is the
question of how many people should be interviewed in each
company and which positions they should preferably have.
In this study, we used only single informants in each firm.
Although we cannot assess informant bias, we believe that
the negative effect of a potential informant bias may be atten-
uated by the homogeneity of informants (marketing direc-
tors). There is evidence that marketing managers are slightly
more optimistic about levels of market-oriented behavior
than are chief executives (Gray et al. 1998). Furthermore, and
in a different context, Deshpandé, Farley, and Webster (1993)
suggest that, in general, managers do not have a good sense of
their firm’s customer orientation. Thus, further research
might use multiple respondents to gain a more valid view of
companies’ overall levels of market orientation. In addition,
we do not have control over demographic characteristics of
respondents. For example, Deng and Dart (1994) report that
of the 248 usable questionnaires in their study, 226 were
from male respondents and only 22 were from female
respondents. Further research could examine whether
respondents’ demographic characteristics, such as sex, age,
or ethnicity, have an influence on responses.

1. We defined “company size” as the number of employees.

NOTE Medium-sized companies had 101–500 employees, and
large companies had more than 500 employees.

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