Role of Customer Orientation in Retail Marketing

An intensely competitive environment forces retailer to increase customer value continuously. Therefore, retailers aggressively adopt Customer Relationship Management (CRM) and Supply Chain Management (SCM) in service development process. At the same time, Customer Orientation (CO) and Marketing Capabilities (MC) are key drivers when retailers create customer value. The present study integrates these different concepts into a single conceptual model. This conceptual model investigates the relationships among CO, CRM, SCM, and MC, and their impacts on financial performance. Data were collected from Japanese retailers and analysed using structural equation modelling. The results show that CO has a positive impact on financial performance through three constructs: CRM, SCM, and MC. Also, CRM and SCM have a mediating role between CO and MC. The key theoretical contribution of this paper is that it shows the mediating effects of CRM, SCM, and MC between CO and financial performance.