The concepts of the marketing concept, a market orientation, relationship marketing, and Supply Chain Management (SCM) are not separate. Rather they are inextricably intertwined.
The market orientation of a firm directs the firm to move toward relationship marketing to deal with the increasing complexity of building and learning new sources of competitive advantage beyond the firm. A market orientation plays a pivotal role in implementing SCM. First of all, a firm’s market orientation produces and stores valuable market information that is needed in the process of building, maintaining, and enhancing supply chain relationships. For example, since a firm has information about customers, suppliers, competitors, sociopolitical environments, and technological trends, it could answer such questions as which supply chain best serves its customers’ needs, with which firms it should work to implement SCM, and what should be the objectives to be pursued in SCM.
One of the components of the implementation of SCM is information sharing through two-way communication between partners within a supply chain. A market orientation should indirectly contribute to information sharing within a supply chain because market information obtained by individual partners could serve as the basis of shared information among the supply chain partners. Information sharing among the partners in a supply chain may simply be part of practicing organizational learning within the boundary of a supply chain rather than the boundaries of individual firms and dyadic inter-firm relationships.
Two major ongoing changes in SCM practices are (organizational) learning through the supply chain and working better with suppliers. When combined, these changes help partners within a supply chain achieve better two-way relationships with suppliers. With improved information exchange, partners are better able to utilize supplier creativity and knowledge, improve processes (particularly for cost savings and performance benefits in the supply chain), and encourage individual learning within an established supply chain context. A market orientation facilitates relationship marketing that, in turn, could promote the implementation of SCM indirectly vis-à-vis relationship marketing. Building and maintaining close long-term relationships among partners beyond the life of a contract that encourage inter-firm coordination are needed for the implementation of SCM.
Relationship marketing depends on inter-firm cooperation that focuses on the systematic development of ongoing, collaborative business relationships. Therefore, the implementation of relationship marketing promotes inter-firm cooperation, in addition to close long-term relationships among the supply chain members.
Therefore, the role of market orientation in SCM is essential.