Beckman, Harris

CHARM 2007 Full Papers CHARM 2007 The Apple of Jobs’ Eye: An Historical Look at the Link between Customer Orientation and Corporate Identity Terry Beckman, Queen’s University, Kingston ON, CANADA Garth Harris, Queen’s University, Kingston ON, CANADA When a firm has a strong customer orientation, it Marketing literature positively links a customer orientation essentially works at building strong relationships with its with corporate performance. However, it does not customers. While this is a route to success and profits for a elaborate on the mechanisms that allow a customer firm (Reinartz and Kumar 2000), it is only successful if a orientation to function effectively. Through a customer customer sees value in the relationship. It has been shown orientation a firm builds a relationship with the customer, that customers reciprocate, and build relationships with who in turn reciprocates through an identification process. companies and brands (Fournier 1998). However, in This means that the identity of a firm plays a significant forming a relationship with the firm, customers do this role in its customer orientation. This paper proposes that through an identification process; that is, they identify with customer orientation is directly influenced by corporate the firm or brand (e.g., Battacharya and Sen 2003; identity. When a firm’s identity influences its customer McAlexander and Schouten, Koening 2002, Algesheimer, orientation, firm performance will be positively impacted. Dholakia and Herrmann 2005), and see value in that An historical analysis shows three phases of Apple, Inc.’s corporate identity and relationship. While a customer life during which its identity influences customer orientation establishes a focus on customers, there are many orientation; then where Apple loses sight of its original different ways and directions that a customer focus can go. identity, and thus has an ineffective customer orientation; The identity of a firm gives it a long-term focus and then with the return of Steve Jobs, and the re-instatement of direction that contributes to its success; that focus and its original identity, Apple’s customer orientation is once direction could guide and influence the type of customer again potent and profitable. orientation of the firm. Thus, simply focusing on customers, with whatever the firm has to offer may be inadequate in meeting the needs of the customers. The firm’s identity, as Much of marketing thought in recent years has been seen by the customer, is a key consideration as the based on the notion that a market orientation is critical to customer’s identity and experience is enacted through the the overall success of a firm (e.g., Jaworski and Kohli identification with the firm. This suggests that while a 1993), and that there is a “substantial positive effect of a customer orientation is important, it will be most effective if market orientation on the profitability” of businesses it works through an identification process. (Narver and Slater 1990, 20). Kohli, Jaworski and Kumar However, one does not see the role of corporate (1993, 467) claimed that the market orientation “concept identity on customer orientation in the marketing literature. represents the foundation of high-quality marketing Thus this paper attempts to answer the question: How does practice.” Market orientation has been described as an corporate identity impact customer orientation and how do “organizational culture” (Narver and Slater 1990, 21), the two interact to impact firm performance? Answering this which expands marketing beyond just an organizational question will show the role that corporate identity plays in function, and suggests that it is an integral part of the entire customer orientation; that is, how does corporate identity organization (Kennedy, Goolsby and Arnold 2005). At the effect customer orientation? Additionally, answering this root of market orientation is meeting the needs of question will lead us to a better understanding of the firm customers, embedded as “customer orientation” (Lukas and performance implications when the corporate identity does Ferrell 2000; and Im and Workman 2004). That is, the not match the customer orientation focus. customer is the focal point of a market oriented firm; as In order to examine this question, this paper looks at such, much of the existing research indicates a positive link Apple, Inc. over its life. The first section of this paper is the to positive business performance directly from the customer conceptual integration of the customer orientation and orientation component of market orientation (e.g., corporate identity. Then the methodology is described, Deshpandé, Farley and Webster 1993). followed by an analysis of the historical data related to Apple. Next is a discussion of the results of the analysis. As 1 CHARM 2007 with any research there are limitations to this study, Corporate Identity which are reviewed along with suggestions for future research. Closing off the paper is the conclusion section. Corporate identity is an answer to the question “who are we as an organization?” and is more broadly known as THEORETICAL DEVELOPMENT the “mental associations about the organization held by organizational members” (Brown et al. 2006, 4). Cheney This section provides an overview of the key terms to and Christensen (2001, 248) say that the primary reason for be looked at in more detail through the rest of this paper. answering this question is to “control … how the Giving an overview at this point allows for a more logical organization is commonly represented.” Albert and Whetten conceptual integration that guides the data analysis and (1985) maintain that the core organizational identity is what leads to the paper’s conclusions. Thus the salient points of is central, enduring and distinctive (CED) about the customer orientation, corporate identity and customer organization. As such, it is known and held by the senior identification are covered, followed by their integration. managers or leaders in an organization, and it is viewed as a “collective-level phenomenon” (Brown et al. 2006, 5). Market and Customer Orientation Albert and Whetten (1985) suggest that corporate identity is organizationally held, is a property of the organization and Customer orientation has been defined as: “the is first established when the company is formed (or very sufficient understanding of one’s target buyers to be able to shortly thereafter), by the original leaders or founders of the create superior value for them continuously” (Narver and company. Slater 1990, 21). Kohli and Jaworski (1990, 3) found that “a Having and knowing its identity allows a company to customer focus is the central element of a market put together a strong and effective strategy. In particular, a orientation.” Not only is customer orientation fundamental company draws on its identity to present an image, or in market orientation, it is central to the entire marketing images of itself to its various constituents – such as its concept (Webster 1988). The marketing literature contains customers. The identity provides a focus on which many references to the link between a customer orientation organizational members can concentrate and a point around and business success (e.g., Deshpandé, Farley and Webster which they can coordinate efforts. In turn, the image that the 1993; Narver, Slater and MacLachlan 2000). company derives from its identity and projects to Typically customer orientation is empirically analyzed constituents is what the constituents can identify with, and in the context of existing corporations, and is thought of in through that identification we see outcomes such as loyalty, terms of how well (or poorly) a firm operates in this regard. positive word of mouth, and increased sales (Battacharya However, if one thinks back to the roots and establishment and Sen 2003; Algesheimer, Dholakia and Herrmann 2005). of a firm, it is possible that the founders of the firm primarily had a customer orientation prior to start-up. That Integration of Customer Orientation and is, they had an understanding of a group of people – the Corporate Identity group that would be called “target customers” when the firm became operational. It could be argued that through the Key to this paper is the notion that there is an understanding of the people, and knowledge of the market, identification process that occurs between customers and a the founders recognized a gap, and they thought that by firm. Bhattacharya and Sen (2003) proposed that customers filling this gap they could create superior value for these would identify with a firm if they thought that its identity people. While it is certainly possible that some firms started was both similar to their own identity, and was distinctive. with different orientations (e.g., a product orientation), one Customers engage in this identification process to support could argue that many firms’ operations would not continue and supplement their own self-concept. Corporate identity – or even get started – if they did not recognize the needs of should be a key component in a customer building an their potential customers. Thus even prior to the formation experience and a relationship with a brand (Algesheimer, of, and perhaps the catalyst of the formation of the firm was Dholakia and Herrmann 2005). Thus, by managing its a customer orientation; and if the startup of a firm is driven identity to accomplish this, a firm can create superior value by a customer orientation, it is reasonable to assume that in for its customers (i.e., have a customer orientation). This the early stages of a firm’s life, it remains customer means however, that the customer orientation of the firm is oriented. directly guided and impacted by its identity through the At this point the founders have a vision for meeting the process of customer Identification. needs of its customers and guide the firm in this vision. This Corporate identity is established when the company is is supported by the Kennedy, Goolsby and Arnould (2003) formed by the original leaders or founders of the company.

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