The brand orientation-performance relationship: An examination of moderation effects

TLDR: In this article, the authors examined whether the recently validated brand orientation-performance relationship is moderated by firm-related internal factors and/or market-related external factors and found that only external factors are found to moderate the brand orientation performance relation, whereas internal factors seem to have no moderation effects.

Abstract: The study examines whether the recently validated brand orientation-performance relationship is moderated by firm-related internal factors and/or market-related external factors. Six moderators are investigated namely (1) firm age, (2) firm size, (3) branding know-how, (4) customer type, (5) industry type and (6) market life cycle. Confirmatory factor analysis is used to validate the constructs and test measurement invariance. Moderation effects are examined using multigroup structural equation modeling. The data consist of 797 valid responses from Finnish small and medium-sized enterprises (SMEs). Only external factors are found to moderate the brand orientation-performance relation, whereas internal factors seem to have no moderation effects. The results show that the effect of brand orientation on brand performance is moderated by customer type and market life cycle. It is reported that the effect is greater in firms serving consumers than in other businesses, and also in firms operating in declining/stable markets than in growing markets. This is among the first studies to empirically examine the performance effects of brand orientation in relation to moderation effects. Differing from most earlier papers, the present study examines brand orientation in the context of SMEs. The results have implications for both practitioners and researchers.