The effect of market orientation on dependence and satisfaction in dyadic relationships

Purpose - This paper seeks to examines the effect of manufacturer market orientation on distributor dependence and satisfaction with the relationship, and to analyse how this dependence affects distributor satisfaction, with specific reference to the Spanish ceramic tile industry, Design/methodology/approach - Two parallel sets of individual interviews with a total of 222 manufacturers and distributors were conducted by a private research institute. They yielded 179 dyads of interaction. Market orientation, dependence and satisfaction were measured by five-point Likert scales. The data were used to test 11 hypotheses by structural equation modelling. Findings - Analysis of the findings suggests that all aspects of manufacturers' market orientation have a positive effect on distributors' satisfaction, except response implementation and the influence of distributor dependence. Contrary to expectations, dependence on the manufacturer adversely affects distributor satisfaction. The conclusion is that adoption of market orientation is justified in practice by increased dependence and satisfaction among distributors, in addition to other benefits discussed in the literature. Research limitations/implications - Although the study only focuses on one industry, and the dependence measurement scale has been limited to two items, in order to obtain an acceptable reliability level, the results are clear within those limitations and are transferable with appropriate caution to the general context. Originality/value - This study addresses a gap in the research into the effect of market orientation on distribution channel relationships, and provides useful planning information on the market orientation dimensions that influence dependence and satisfaction in the relationships between members at different levels in a channel.