18 / Journal of Marketing, September 2014
18 / Journal of Marketing, September 2014
(Narver and Slater 1990) offers key insights into the cus- entation efforts selectively. Although prior research (Evans tomer management practices of firms, but prior research has
and Hagiu 2007, p. 62) has dismissed prescriptions to exclusively addressed one-sided markets. That is,
“build share fast” on the buyer side, our results suggest that researchers have focused on total orientation but over-
such asymmetric orientation efforts might be beneficial in looked the asymmetry aspect, which is manifested only in
some conditions.
multisided markets. However, the presence of intermediat- Although the findings from the antecedent model do not ing platforms in dyadic exchange relationships challenges
directly address platform performance, they do suggest traditional notions of customer orientation, so established
potential courses of action. First, a platform with concen- notions of customer management practices should be refor-
trated buyers should focus asymmetrically on sellers. Sec- mulated to reflect the evolving nature of firms, from actor
ond, platforms should tailor asymmetry in their orientation in dyadic exchange to orchestrators of complex, multisided
toward sellers (in response to buyer concentration) in accor- buyer–seller networks.
dance with their specific business model; they should focus Drawing on interfirm relationship research, we show that
more asymmetrically toward sellers when they use dynamic exchange characteristics such as dependence and uncer-
rather than static pricing and with one-sided rather than tainty can determine the orientation structure both individu-
two-sided matching processes.
ally and in complementary relationships with each other. Thus, both total and asymmetric orientations are strategic
The ability to manage customers is central to what firms decision variables, chosen in response to focal antecedent
do (Kumar and Reinartz 2012). Our framework, which conditions. Emerging research (Rochet and Tirole 2006)
focuses on a platform’s ability to manage multisided buyer– has noted that some, but not all, platforms focus on differ-
seller markets, is consistent with this view; in particular, it ent sides of their marketplace, but the specific reasons for
depicts the value-creating role of customer orientation ele- why platform firms might do so remains undocumented. We
ments. To the extent that fostering an appropriate orienta- take an initial step by offering a specific rationale for the
tion involves the assessment of multiple customer- (e.g., orientation structure, rooted in well-established theories of
buyer concentration) and platform- (e.g., matching process) interfirm exchange (e.g., Kumar, Scheer, and Steenkamp
level considerations, customer orientation elements could 1995, 1998), and by providing empirical support for our
provide a basis for enduring advantages for platform firms. theoretical account. Our study thus serves as a conceptual
bridge between emerging research on platform organiza-
Appendix: Measures
tions and established theories of interfirm relationships. In describing antecedents of orientation structure, we also
Customer Orientation Toward Buyers
integrate the nascent research on platforms with established thought pertaining to customer orientation.
Please indicate your agreement with the following ques- Our research also reveals that platforms that structure
tions concerning the orientation of your electronic market- their customer orientation in light of dependence considera-
place (1 = “disagree,” and 7 = “agree”): tions have superior performance. The findings regarding the
B1. Our business objectives for the marketplace are primarily beneficial effects of orientation asymmetry are relevant for
driven by buyer satisfaction.
the broader marketing strategy literature, which has tended B2. We constantly measure our level of commitment to serv- to assume that a consistently high focus on all customers is
ing buyer needs.
desirable. In contrast, we argue that asymmetry can be har- B3. We give close attention to servicing buyers. nessed purposefully and for productive purposes. At the same time, the effect of orientation asymmetry on platform B4. Our marketplace strategy for competitive advantage is
based on understanding of buyer needs. performance varies with customer concentration, so asym-
metry, if cultivated indiscriminately (e.g., with buyers who B5. We measure buyer satisfaction systematically and are concentrated), could have the unintended effect of frequently.
undermining platform outcomes. These nuanced results regarding orientation asymmetry suggest the need for more
Customer Orientation Toward Sellers
specific theories that can explain irregularities in the conse- Please indicate your agreement with the following ques- quences of firm orientations. Research is necessary to
tions concerning the orientation of your electronic market- establish when asymmetry is beneficial or problematic and
place (1 = “disagree,” and 7 = “agree”): whether it has nonlinear effects on performance.
Our research also offers takeaways for practitioners. S1. Our business objectives for the marketplace are primarily First, total orientation is a key lever that firms can manipu-
driven by seller satisfaction.
late to influence performance. Second, managers should S2. We constantly measure our level of commitment to serv- carefully evaluate the contingencies that would enable them
ing seller needs.
to harness the performance potential of total orientation. S3. We give close attention to servicing sellers. Total orientation likely supports performance with concen-
S4. Our marketplace strategy for competitive advantage is trated customers; platforms should benefit from focusing
based on understanding of seller needs. asymmetrically on sellers, but only when buyer concentra-
S5. We measure seller satisfaction systematically and tion is increasing. Thus, firms must invest in customer ori-
frequently.
Customer Orientation Structure / 19
Total Customer Orientation
__ Lead Generator: A seller driven marketplace, where the market makers derives revenue from fixed commission on
TCO = (B1 + B2 + B3 + B4 + B5 + S1 + S2 + S3 + S4 + sales, or fixed fees for generating qualified sales leads for S5)/10
sellers.
Customer Orientation Asymmetry __ Workflow Marketplace: Provides project tracking or col-
laboration services for complex, iterative, multi-party pro- COA = [(S1 – B1) + (S2 – B2) + (S3 – B3) + (S4 – B4) +
jects (such as in construction) and charges fixed fees for its (S5 – B5)]/5
services. __ Other
Platform Performance
(To code the matching process, we used a dummy variable Please rate aspects of the performance of your electronic
equal to 1 if the electronic marketplace was an exchange marketplace (1 = “unsatisfactory,” and 7 = “satisfactory”):
and 0 otherwise. To code the price discovery process, we 1. Return on investment relative to objective
used a dummy variable equal to 1 for auctions, reverse auc- 2. Sales relative to objective
tions, and exchanges and 0 otherwise.) 3. Profit relative to goals 4. Growth relative to objective
Transaction Fee as Proportion of Total Revenue
5. General success Please indicate the percentage of your marketplace reve- nues that comes from the following:
Buyer-Side Concentration
Transaction fees __ %.
Please indicate the accuracy of the following statements in describing aspects concerning buyer side of your electronic
Platform Firm Self-Participation
marketplace (1 = “disagree,” and 7 = “agree”; r = reverse Please check the statement that most accurately describes coded):
the operating status of the electronic marketplace you man- 1. The buyer side of our marketplace can be characterized as
age:
fragmented (r). __ We transact in the marketplace as a buyer (coded 1). 2. In the marketplace, a large number of buyers compete with
one another for seller contracts (r). __ We transact in the marketplace as a seller (coded 1). 3. Buyers wield a lot of power in our marketplace.
__ We maintain neutrality and do not transact in the market- 4. A few large buyers dominate the marketplace.
place (coded 0).
Seller-Side Concentration
Industry Complexity
Please indicate the accuracy of the following statements in Please indicate your agreement with the following state- describing aspects concerning seller side of your electronic
ments concerning your electronic marketplace (1 = “dis- marketplace (1 = “disagree,” and 7 = “agree”; r = reverse
agree,” and 7 = “agree”):
coded): 1. Our customer demands vary a lot. 1. The seller side of our marketplace can be characterized as
2. We are often surprised by our customers’ behavior. fragmented (r).
3. A lot of user firms join and/or leave our marketplace. 2. In the marketplace, a large number of sellers compete with
one another for buyer contracts (r).
Platform IT Capabilities
3. Sellers wield a lot of power in our marketplace. 4. A few large sellers dominate the marketplace.
Please circle the number that most accurately describes the information technology (IT) capabilities of your organiza- tion (1 = “disagree,” and 7 = “agree”):
Two- (vs. One-) Sided Matching Process and Dynamic (vs. Static) Pricing (Dummy Coded)
Platform IT Infrastructure
Please check the statement that accurately categorizes the 1. We have strong IT planning capabilities. business model of your marketplace:
2. We have extensively invested in building our IT infrastructure. 3. We have compatible IT platforms across business functions.
__ Catalogue Aggregator: The market maker aggregates cata- logues (product offerings) of multiple vendors and sells to
4. We regularly update our IT assets. buyers at a static (fixed) price.
5. We have a good understanding of the possible benefits of IT __ Auction: Multiple buyers bid competitively for products
applications.
from a single supplier. __ Reverse Auction: Buyers post their needs for products or
Platform IT Skills
services and suppliers bid competitively for fulfill the
1. We are experienced with IT.
needs. 2. We have strong technical IT skills. __ Exchange: A marketplace where buyers and sellers interact
to exchange information and engage in trade, facilitated 3. We have adequate knowledge about IT. through some negotiated dynamic pricing system (such as
4. We invest heavily in our IT human resources. a bid and ask system).
5. We have adequate managerial IT skills.
20 / Journal of Marketing, September 2014