Applying the marketing concept to cultural organisations: an empirical study of the relationship between market orientation and performance

TLDR

Nonprofit organisations increasingly adopt business‑management concepts. The study investigates how applying the marketing concept affects performance in nonprofit arts organisations. The authors surveyed arts organisations in two Canadian cities and used a structural equation model to assess how marketing activities and culture influence customer satisfaction, peer reputation, and resource attraction. The model fit well and supported six hypotheses; market‑driven activities foster a market‑oriented culture, which in turn predicts increased resources, higher customer satisfaction, and greater peer reputation. © 2002 Henry Stewart Publications.

Abstract

Abstract A recent trend in nonprofit organisations is an emphasis on business management and concepts. This paper examines the application of the marketing concept to nonprofit arts organisations through an analysis of the relationship between market orientation and organisational performance. Data were collected from arts organisations in two large Canadian cities, and a structural equations model was developed to test the impact of marketing activities and culture on three performance variables (customer satisfaction, peer reputation and resource attraction). The analysis shows that the model fits the data well and that six hypotheses pertaining to the relationship between market orientation and organisational performance were supported. The study concludes that those organisations that implemented more market‐driven activities into their marketing plans were more likely to develop a market‐oriented internal culture. A market‐oriented culture not only predicted a growth in resources and higher levels of customer satisfaction, but also a growth in reputation among peers. Copyright © 2002 Henry Stewart Publications