Exploring the Impact of Customer Loyalty on Market Orientation-Business Performance Relationship: Evidence from Chinese Services Firms

Customer loyalty and market orientation have been respectively considered important success factors to a firm¿s performance, but little attention has been focused on their relationship and their integrated role on business performance. The present study attempts to provide a necessarily partial model for how this impact takes place using customer loyalty as intermediate variable. This study targets the services industry in China for it subjecting to more competitive environment. Using data collected from 101 services firms across China, this study empirically tests a model that demonstrates the relationship between market orientation, customer loyalty and business performance. The results confirm the hypotheses proposed, which suggest that market orientation not only has a strong and positive direct impact on business performance in service companies, but also has an indirect influence through the mediating role customer loyalty. Based on the results, some implication for managers is drawn regarding to the value of market intelligence in both customer relationship management and business performance improvement in service sector.