Research Article
A Study on the Relationship between Market Orientation and Business Performance in the Hotel Industry, and Mediating Variables
Published: January 1999 · Vol. 28, No. 1 · pp. 75-102
Full Text
Abstract
This study investigated the relationship between market orientation and business performance in the domestic hotel industry, and also structurally examined the mediating roles of employee satisfaction, service quality, and customer satisfaction in the relationship between market orientation and business performance. Additionally, it investigated whether a firm's market orientation efforts ultimately lead to improved business performance as well as enhanced customer loyalty. Data were collected from 115 hotels, with surveys administered to three executives/employees and three customers from each hotel. The collected data were analyzed using LISREL 8W. The empirical analysis results are summarized as follows. First, higher market orientation was associated with higher employee satisfaction. Second, higher market orientation was associated with higher customer satisfaction. Third, higher market orientation was associated with higher business performance. Fourth, higher employee satisfaction was associated with higher service quality. Fifth, higher service quality was associated with higher customer satisfaction. Sixth, higher service quality was associated with higher customer loyalty. Seventh, higher customer satisfaction was associated with higher customer loyalty. Finally, the coefficient for the relationship between customer satisfaction and business performance was positive in direction but not statistically significant. Lastly, the theoretical contributions, implications, limitations, and future research directions of this study were discussed.
