sustainability

Article
The Effect of Market Orientation on Performance of
Sharing Economy Business: Focusing on Marketing
Innovation and Sustainable Competitive Advantage
Youn Kue Na 1 , Sungmin Kang 2, * and Hye Yeon Jeong 3
1 Department of Art and Culture Research Institute, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu,
Seoul 156-756, Korea; [email protected]
2 College of Business and Economics, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu,
Seoul 156-756, Korea
3 Department of Fashion Business Management, FIT (Fashion Institute of Technology), SUNY (State University
of New York) Korea, 119 Songdo Moonhwa-ro, Yeonsu-gu, Incheon 21985, Korea; [email protected]
* Correspondence: [email protected]; Tel.: +82-10-2243-8647




Received: 21 December 2018; Accepted: 28 January 2019; Published: 30 January 2019


Abstract: This study investigated relationships among the market orientation of sharing economy
business, marketing innovation, sustainable competitive advantage (SCA), and performance.
Attempts are made to understand market orientation from cultural and behavioral perspectives
to accelerate marketing innovation and identify measures for SCA and performance building.
Frequency, reliability, validity, fitness, and path analyses were performed on 400 respondents, and a
structural model was used. The results are as follows. First, functional coordination of the cultural
market orientation of sharing economy business with consumer orientation significantly affected
product innovation, but competitive orientation’s effect on product innovation was not significant.
Competitive orientation and functional coordination significantly affected communication innovation,
but consumer orientation’s effect on communication innovation was not significant. Second, market
information generation and response to market information of behavioral market orientation of
sharing economy business significantly influenced product innovation, but market information
exchange’s influence on product innovation was not significant. Even though market information
exchange and response to market information had a significant influence on communication
innovation, the influence of market information generation on communication innovation was
not significant. Third, both product and communication innovation of the marketing innovation
of sharing economy business significantly influenced SCA. Fourth, the SCA of sharing economy
business significantly influenced market dominating power.

Keywords: sharing economy business; market orientation; marketing innovation; sustainable

competitive advantage; performance

1. Introduction
Economic activity is expected to transition to a “cooperative sharing society” in which economic
activity will gradually shift from “ownership” to “access based sharing”, and “exchange value in terms
of exchanging resources” to “shared value in terms of sharing commons” [1]. As such, the perceptual
changes in consumption values have expanded to the concept of “sharing” along with sustainability
and the importance of cooperation, and the social movements to establish a better consumption
culture by sharing surplus products and services eventually created a new type of business “sharing
economy” [2]. The sharing economy started to consume surplus resources more efficiently based on
collaborative consumption expressed as collaborative consumption or access-based consumption [3].

Sustainability 2019, 11, 729; doi:10.3390/su11030729 www.mdpi.com/journal/sustainability

Sustainability 2019, 11, 729 2 of 19

Most of all, consumers presently also evaluate products based on their product experience rather than
on the product (service) itself and they give more value to how they consume than what they consume
compared to the past [4].
Due to the increased number of consumers participating in collaborative consumption, sharing
companies are also creating new business models and competitively challenging existing companies.
Accordingly, the need for discovering the best practice business models of the sharing economy and
discussion on the direction of relevant market revitalization have been raised [5]. In such a rapidly
changing environment, the ability to quickly restructure strategies and flexibly respond to the market
is very important for increasing the firm’s performance [6]. Market-focused strategic flexibility is also
important, in that a firm’s survival and success depend on the ability to deliver superior customer
values than that of competitors in the market [7]. From this perspective, a firm’s performance increases
when market orientation is strengthened because it improves the ability of the firm to meet customers’
changing needs [8]. For highly market-oriented companies, the creation of higher customer value than
that of competitors is considered to be the goal of establishing and implementing strategies [9]. As such,
market orientation has a positive influence on the market performance of the firm and is recognized as
a theoretically and practically important factor of competitive advantage [10]. Good predictions of
changes by responding to market demands well by achieving sustainable competitive advantage for
the company through market orientation are being emphasized [11].
In this context, market orientation in terms of market creation can be considered as value
innovation in that it creates a new noncompetitive market for a service or product developed, while it
can also be considered as a disruptive innovation in that it leads competition from existing markets
to new ones [12]. Most of all, as a source of idea creation, consumer information acquired from the
market accelerates innovation in the innovation process [13]. Market orientation, which attempts to
satisfy consumers’ desires that are being expressed and potential desires that cannot be expressed,
expects companies to implement meaningful and new marketing programs [14]. From that perspective,
Narver et al. [15] classified market orientation into responsive market orientation that coincides
with consumers’ expressed desires and proactive market orientation that coincides with desires that
consumers were unable to express, such as activities of developing more innovative and new products
or services.
Improvement in the ability to create consumer value through marketing innovation is expected to
increase the competitive advantage of the firm by making differential implementation of marketing
mix possible [13]. Since such an ability to create consumer value can be improved through the learning
effect that is acquired from its repetitive use to solve the marketing problems of the firm, it can lead to
a sustained competitive edge.
In summary, the present study investigated the relationships among the market orientation
of sharing economy business, marketing innovation, sustainable competitive advantage (SCA),
and performance to understand market orientation from cultural and behavioral perspectives. This is
to accelerate marketing innovation using sources acquired from the market, and to identify measures
for SCA and building performance. Especially, the findings are significant in that they can be practical
data for creating marketing innovations of sharing economy business firms in South Korea.

2. Theoretical Background

2.1. Market Orientation

Market orientation is a management thought that overcomes theoretical limitations of marketing
concepts and presents practical activity guidelines. It is considered as the processes of discovering
and understanding desires of not only existing customers, but also potential ones. It is observing and
coping with the activities of existing and potential competitors, allowing a focusing on the knowledge
and resources of the firm in solving problems and opportunities derived through such processes
and activities that develop the organization and management system [16]. In other words, market
Sustainability 2019, 11, 729 3 of 19

orientation can be considered as the tendency of organizational activities to respond to the market
demand better than competitors and predict market changes well to create a sustainable competitive
advantage and high profits [17].
On the perspective and type of market orientation, Narver et al. [15] classified customers’ desires
into desires that customers can and cannot express. They considered activities to satisfy the desire
customers can express as “responsive market orientation” and activities of newly and innovatively
developing products and services focusing on customers’ unexpressed desires as “proactive market
orientation”. Kohli and Jaworski [18] explained market orientation from the “perspective of market
information” in which market orientation is considered as collecting market information on both
current and potential customers, diffusing collected information to departments, and inducing a
proper reaction. From the behavioral perspective, they stated that the subject of action is not only the
marketing department, but also the entire organization, the target of the action is market information,
and furthermore, actions on marketing information are generation, diffusion, and response. Jaworski
and Kohli [19] considered market orientation as a marketing practice concept and materialized it into
the acquisition of market information across the entire organization for the desires of current and
future customers, diffusion of market information to departments, and organizational responses.
Hills and Sarin [20] stated that leading customers is the process of identifying potential desires
that customers were unable to express, and such activities can lead the action and preference to a
new direction. Yang [21] stated that products and services developed through market-creating market
orientation are in line with value innovation [22] from the perspective that they create a new market
without competition, while it is a disruptive innovation [12] from the perspective that they lead
the competition in the existing market to a new market in the future. Yang [21] stated that such a
market orientation can be considered as a systematic value system that can be classified into customer
orientation, cooperation between organizations, and competitor orientation [18]. Customer orientation
has to sufficiently understand target buyers to continuously create effective value for them [23].
Such a market orientation became a key issue in marketing and strategic organization fields
recently and extensive research is being conducted. In connection with this, Jang [11] contended that
market orientation influences a firm’s performance, level of strategic orientation, relationship quality,
and customer retention. Schlegelmilch and Ram [24] empirically investigated the relationship between
external environmental factors and market orientation. Furthermore, Conduit and Mavondo [25]
stated that a firm’s management support, internal communication, human resource management,
organizational commitment, information assurance, and organizational integration have positive
influences, while interorganizational conflict has a negative influence on internal market orientation.
Park and Lee [26] reported that the higher the market orientation, the more improvements in the
firm’s competence variables consisted of satisfaction, innovation, selection and implementation of
competitive strategies, and organizational learning, and customer response variables consisted of
customer satisfaction, service quality, service loyalty, and information sharing. Likewise, firms with
high market orientation are expected to improve the ability to develop products and services and
positively influence technical and managerial innovations, and the influence on managerial innovations
is considered to be relatively larger than others [27].

2.2. Marketing Innovation

Generally, innovation is defined as the orientation of the firm to experiment with ideas or perform
creative processes that can lead to the development of new products [28]. Especially, studies related
to marketing innovations have had a lot of interest in innovation types and diffusion processes and
emphasized the importance of the role of consumers in the marketing efforts of the firm [29].
In this respect, marketing innovation is an innovation to strengthen marketing practice [30].
It is also considered to be an innovation to increase the competitiveness and performance of the
firm by providing improvements and radical solutions for marketing mix related to products, price,
distribution, and promotion [14]. Furthermore, marketing innovation capability is a concept that
Sustainability 2019, 11, 729 4 of 19

includes differentiated brand, [31], product development capability and superior product quality [32],
marketing communication capability and advertising differentiation [33], and the business ability of
salespeople or sales agents [34]. It also means the ability of the firm to effectively allocate, manage,
and implement the resources and capabilities of the firm appropriate for the market condition the firm
is facing [35].
The reason why marketing innovation is important is that it provides customers with superior
value and it can contribute to sales growth by converting demand elasticity to inelasticity [30].
Improvement in customer value creation through marketing innovation is expected to contribute to
the competitive advantage of the firm by making superior implementation of marketing possible [13].
Tamayo-Torres et al. [36] reported that such innovative capability comes from resources, and the
capability of such a firm is created by the combination of resources rather than by a single resource.
Moreover, the innovation capability of the firm can be further strengthened through the mutual synergy
of the resources.
Research has been conducted on the classification of innovation types based on the firm’s
perspective focusing on the target of innovation and the continuity of technology [37], and the
classification of types of these innovation targets was comprehensively carried out from the
firm’s overall perspective, beyond product innovation. Radical and incremental innovations are
representative types according to the classification of types based on the continuity criteria of
technology, and mostly product innovation was the target [29]. Depending on the degree of
influence on the existing consumption process of consumers, the types of new products are classified
into discontinuous innovation, dynamic continuous innovation, and sequential innovation [38].
Furthermore, it has been found that the generic characteristics of innovative products that consumers
perceive (such as perceived relative advantage, cost advantage, enjoyment, reliability, ease of use,
observability, economic feasibility, and possibility of attempt or use) provide consumers with value
and led to their acceptance [39].
To create and maintain competitive advantage in an uncertain environment, the necessity of
innovation capability based on the understanding of the market and customers is suggested [40,41].
That is, firms should attach importance to innovation capability using intangible resources, such as
human resources, rather than developing tangible resources based on investment in equipment or
environmental changes, which directly leads to the competitiveness of the firm. In this regard, the firm’s
competitiveness can be improved by increasing communication capability in the relationship between
industrial customers even in marketing innovation [42]. Continuous maintenance of relationships
with various parties concerned for nonprofit organizations is more important than anything else,
so the organization needs its own differentiated communication capabilities for it to continuously
maintain good relationships with them. As relationship marketing becomes important for nonprofit
organizations, they have to improve customers’ satisfaction with their services through differentiated
communication capabilities in order for the organization to maintain continuous relationships with
consumers [43].
Thus, innovation strategies are suggested as an essential condition for competitive advantage in
the entire process from the production to the sale of the product [30]. Marketing innovation refers to
an integrated process of applying knowledge, technology, and resources to create value in the market,
and the ultimate goal of marketing capabilities is in increasing the value of the firm and meeting the
demand [44].

2.3. Sustainable Competitive Advantage

The ultimate goal of strategic management is the realization of competitive advantage, which
refers to the creation of more value than competitors. It is a unique competitive status the firm has over
competitors through decision making on the distribution and combination of resources and capabilities
for the activity areas and goal achievement of the firm.
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Such a concept of competitive advantage refers to achieving superior performance using the
resources and capabilities of the organization [45]. It means the capability to create a superior
competitive position [46] and superior value for customers based on its greater assets and capabilities,
and implies the capabilities of low cost, differentiation, and centralization [47]. The determinants of a
competitive advantage are variously classified depending on the purpose of the study, such as cost
advantage, differentiation advantage [47], efficiency, quality, innovation, customer responsiveness [48],
cost, quality, time, and flexibility [49].
Creation and maintenance of a competitive advantage in the recent business environment is quite
necessary for short-term revenue generation or securing the growth of family business. To provide
superior value to customers, securing a competitive advantage over competitors is becoming more
important than anything else. Jaakkola et al. [50] stated that a sustainable competitive advantage
is accomplished through learning effects and the firm’s resources that are valuable, rare, difficult to
replicate, and irreplaceable. Dwyer et al. [51] contended that firms have to continuously create value
that competitors cannot imitate by continuously securing irreplaceable resources and capabilities for
them to secure sustainable competitive advantage.
From the resource-based view, core competence can form a competitive advantage specific to
the firm [52], and the intangible resources, such as control and learning, that constitute such core
competence can be usefully used in developing new products and markets [53]. Strategic imitation of
core competence of a firm is generally difficult because the imitating firm has to conduct a series of
similar irreversible investments and learning [54]. Leonard-Barton [55] stated that core competence can
provide the source of a competitive advantage because it can be institutionalized over a long period of
time, become a part of the firm’s knowledge-creating system, and rely on unique interrelationships of
people who are very hard to imitate, dailiness, and technology.
In the field of management strategy, research is being conducted to determine if the firm’s
resources and operational characteristics are related to a competitive advantage that creates sustainable
performance [56]. Banker et al. [57] stated that a firm will achieve sustainable financial performance
when the firm’s resources and processes continuously create value in the future. According to previous
research on the relationship between strategy and performance, firms can secure a competitive
advantage and obtain sustainable performance in terms of profit or cash flow by employing cost
leadership or differentiation strategy.

2.4. Performance
Many previous studies related to market orientation presented management performance as the
dependent variable, and it was presented in a large number of various measurement items. In this
regard, O’Cass and Ngo [58] measured performance using the perception of overall brand performance,
market share, and sales amount when they investigated the relationship between market orientation
and brand performance. Kirca et al. [59] classified market orientation performance into the firm’s
performance, performance for customers, innovation performance, and performance for customers.
Jun and Park [60] stated that because market orientation has significant influence on the customer
orientation of employees, the better the hotel deals with the creation, diffusion, and response to
information, the higher the customer orientation of employees.
Lee et al. [61] reported that market orientation contributes to performance by increasing customer
satisfaction by improving service quality and reducing customer switching costs, influencing customers’
word-of-mouth communication. Kim et al. [62] identified that each construct of market orientation
forms a cause-and-effect relationship, and the creation and diffusion of information influence trust
through information sharing between firms and firm-wide responses. As such, market orientation
can improve the market performance of the firm based on a sensitive response to market changes [63],
and reported to have a positive influence on product development capabilities, product market share,
sales, and earnings [64]. The importance of considering both financial and nonfinancial aspects in
management performance measurement is emphasized [60].
Sustainability 2019, 11, 729 6 of 19

Market orientation is based on the acquisition of market information and response from sources,
such as customers and competitors, so the higher the market orientation of the learning organization,
the more improvement in customer satisfaction, and customer satisfaction compared to competitors
influence the growth and profitability [65]. The performance of a firm that has a sustainable competitive
advantage will increase further as time passes because the firm will have more flexibility in the
implementation of marketing mix than competitors [8]. The study of Naidoo [30] reported that the
marketing capabilities of a firm can be improved by the learning effect, and continuously increase
earnings. Thus, the market performance of the firm can be improved based on its sensitive response to
market changes [63].

3. Research Method and Procedure

3.1. Research Model and Hypotheses

Market creation is active market orientation that leads consumers rather than responding to them,
and the more the firm’s market orientation is strengthened the better the firm’s capability to meet
consumers’ changing desires, resulting in improvements of the firm’s performance [30]. Such market
orientation can be understood from the cultural and behavioral perspectives. Market orientation
from the cultural perspective means competitor orientation, consumer orientation, and functional
coordination [66], while market orientation from the behavioral perspective means exchange, creation,
and response to market information [18]. The market orientation from the combined cultural and
behavioral perspectives can be considered as a strategic orientation that can accomplish information
exchange, creation, and response about consumers and competitors through functional coordination.
Customer orientation, which tries to meet customer’s future desires, enables innovations
significant enough to rapidly change customers’ preferences [20]. Vorhies and Morgan [44] stated
that organizations with strong market orientation establish capabilities which can develop products
and service brands that can satisfy customers’ desires. Market oriented organizations make efforts
to actively cope with market responses by establishing an open communication system for sharing
market information through functional coordination among the members [67]. Firms that try to create a
market focus on the desires of a small number of innovative groups rather than identifying the desires
of the general public, and the ideas obtained from such innovative groups accelerate innovations [68].
Day and Wensley [35] stated that the acquisition and exchange of information about the strength and
weakness of competitors increase the possibility of developing a marketing mix different from that of
competitors. Hills and Sarin [20] stated that the reason why market oriented responses have positive
influence on marketing innovation is that the more the firm creates market information and exchanges
knowledge of it within the firm for it to respond to the changes in customers’ desires and competitors’
movements, the greater the increase in innovation.
Weerawardena and O’Cass [13] stated that customer orientation, which tries to meet customer’s
future desires, enables innovations significant enough to rapidly change customers’ preferences, and
furthermore, improvement in customer value creation through marketing innovation is expected
to contribute to the competitive advantage of the firm by making the implementation of superior
marketing possible [13]. As such, the reason why market oriented responses have significant
influence on marketing innovation is the creation of market information to cope with the changes
in customers’ desires and competitors’ movements, and the ability of market oriented responses to
enhance innovation by increasing the exchange of such knowledge within the firm [20]. As the market
response is strengthened, the sharing economy business responds to customers’ desire to express, and
as a response to such desires, the response of business will be differentiated from existing marketing
mix. Consumer information acquired from the market can further accelerate innovation since it is
the source of ideas for innovative processes [13]. Exchange and acquisition of information about
competitors’ strengths and weaknesses will increase the possibility of developing a marketing mix
differentiated from that of competitors [35]. Accordingly, market orientation appears to accelerate
Sustainability 2019, 11, 729 7 of 19

innovations through the development of new marketing mixes for meeting consumers’ desires and
effective response to competitors’ action even from the perspective of sharing economy business.
A sustainable competitive advantage strengthens the firm’s market power in the firm’s
product launch, price lead, distribution channel improvement, and promotion deployment, and
the strengthened
Sustainability 2018, 10, x market
FOR PEERpower
REVIEWwill gradually increase through learning effects, increasing 7 of 20
performance [13,30]. Gulati et al. [69] contended that resources, such as information, capital, products,
and services,
services, havehave the the potential
potential to to maintain
maintain andimprove
and improvethe thefirm’s
firm’s competitive
competitive advantage,
advantage, and
marketing
marketing innovation
innovation through
through them
them have significant influence on competitive advantage [8]. Vorhies Vorhies
and Morgan [44] argued argued that firms can have a capability that is even more difficult to replicate for
competitors through interactions among marketing mix by improvement in even any one of of the
the
capabilities of the firm. firm. Kumar et al. [8] stated
stated that
that firms
firms with
with aa sustainable
sustainable competitive
competitive advantage
advantage
will
will build
build performance
performance because they will have have more
more flexibility
flexibility in
in the
the implementation
implementation of marketing
marketing
mix than competitors
competitors as astime
timepasses.
passes.If Ifcompetitive
competitive advantage is sustained, the market
advantage is sustained, the market power power of
of the
the
firmfirm
willwill be strengthened
be strengthened in firm’s
in the the firm’s product
product launch,
launch, distribution
distribution channel
channel improvement,
improvement, price price
lead,
lead, and promotion deployment, and the strengthened market power
and promotion deployment, and the strengthened market power will gradually increase will gradually increase through
learning
learning effects,
effects, increasing
increasing performance
performance [70].[70].
Market creation orientation
orientation formed based on potentialpotential desires
desires increases
increases meaningful
meaningful marketing
marketing
innovation for future consumers, and furthermore, secures a sustainable competitive
innovation for future consumers, and furthermore, secures a sustainable competitive advantage, advantage, which
is expected
which to act asto
is expected anact
outstanding achievement
as an outstanding of sharingofeconomy
achievement sharing business.
economy Based on the
business. discussion
Based on the
above, the following
discussion above, theresearch
following model in Figure
research model 1 and
and hypotheses
hypotheses werewere established.
established.

Figure 1. Research model.

Figure 1. Research model.
Hypothesis 1 (H1). Market orientation of sharing economy business (cultural, behavioral) will positively (+)
• Hypothesis 1 (H1). Market orientation of sharing economy business (cultural, behavioral) will positively
influence marketing innovation.
(+) influence marketing innovation.
•
Hypothesis 2 Market
2 (H2).
Hypothesis innovation
(H2). Market of sharing
innovation of economy
sharing business
economy will positively
business will (+) influence(+)sustainable
positively influence
competitive advantage.
sustainable competitive advantage.
• Hypothesis
Hypothesis 3 (H3).
3 (H3). Sustainable
Sustainable competitive
competitive advantage
advantage of of sharingeconomy
sharing economybusiness
businesswill
willpositively
positively (+)
(+)
influence performance (market
influence performance (market power).power).

3.2. Measurement
3.2. Measurement Tools
Tools
The measurement
The measurement tooltool for
for the
the present
present study
study waswas composed
composed of of items
items of
of market
market orientation,
orientation,
marketing innovation, sustainable competitive advantage, and market power
marketing innovation, sustainable competitive advantage, and market power of sharing economy of sharing economy
business, and demographic characteristics. Market orientation is the point of strategic
business, and demographic characteristics. Market orientation is the point of strategic orientation orientation
accomplished through
accomplished through adjustments
adjustments amongamongthe thefunctions
functionsofofexchange,
exchange,generation,
generation, and
and response
responseto
information about competitors and consumers, and it is composed of cultural
to information about competitors and consumers, and it is composed of cultural and behavioral and behavioral
perspectives based
perspectives based on
onthe
thestudies
studiesofofConduit
Conduitand Mavondo
and Mavondo [25],[25],
HillsHills
and Sarin [20], Jeong
and Sarin [17], Kohli
[20], Jeong [17],
and Jaworski
Kohli [18], Kumar
and Jaworski et al. et
[18], Kumar [8],al.Narver et al. et[15],
[8], Narver Schlegelmilch
al. [15], and Ram
Schlegelmilch and Ram[24], [24],
Shergill and
Shergill
Nargundkar [14], and Yang and Chung [16]. For market orientation, 19 items
and Nargundkar [14], and Yang and Chung [16]. For market orientation, 19 items were measured. were measured. For
marketing innovation, 7 items were measured by composing innovation in products, costs,
transactions, and communication activities as innovation for strengthening marketing
implementation based on the studies of Kim and Lee [28], Kumar et al. [8], Naidoo [30], Shergill and
Nargundkar [14], Tamayo-Torres et al. [36], Tellis et al. [29], Weerawardena and O'Cass [13], and
Vorhies and Morgan [44]. For sustainable competitive advantage, 3 items were measured by
Sustainability 2019, 11, 729 8 of 19

For marketing innovation, 7 items were measured by composing innovation in products, costs,
transactions, and communication activities as innovation for strengthening marketing implementation
based on the studies of Kim and Lee [28], Kumar et al. [8], Naidoo [30], Shergill and Nargundkar [14],
Tamayo-Torres et al. [36], Tellis et al. [29], Weerawardena and O’Cass [13], and Vorhies and
Morgan [44]. For sustainable competitive advantage, 3 items were measured by composing items
so that the competitive advantage factors of sharing economy business consistently produce a
superior performance than competitors based on the studies of Dwyer et al. [51], Kumar et al. [8],
Reid and Sanders [49], Sigalas [45], Wei et al. [52], Weerawardena and O’Cass [13], and Won and
Ryu [56]. Performance was measured using 3 items by composing performance produced as a result
of improvements in growth, image, and consumer relationships in the sustainable market of sharing
economy business based on the studies of Hult and Ketchen [63], Kumar et al. [8], Jun and Park [60],
Naidoo [30], O’Cass and Ngo [58], and Weerawardena and O’Cass [13].

3.3. Data Collection and Analysis

The present study collected data through a survey using a 5-point Likert scale questionnaire.
To determine the appropriateness of the measuring instrument, the survey was conducted in the
following method.
As an initial survey, a marketing scale for market orientation and marketing innovation for
sharing economy business was actualized on South Korean experts in sharing economy business
using the Delphi technique. As a second analysis, specific contents on a sustainable competitive
advantage and influencing factors of performance were extracted by conducting the Critical Incident
Technique through open-ended questions on value relationships that consumers actually experienced
in sharing economy services using experienced users of sharing economy businesses as the analysis
unit. Next, an accurate evaluation was conducted on the survey instrument. The survey was conducted
to collect reliable and valid data using convenience sampling. Data collection was conducted through
a preliminary and main survey on consumers who have experienced the products and services
(campaign) of sharing economy business at each stage.
In the preliminary survey, in March 2017, appropriate items were selected through repeated
evaluations and discussions among business administration major graduate students. It was followed
by a preliminary survey on 100 people with experience in sharing economy business during April
1-10, 2018. For the purpose of research generalization, the present study selected participants from
consumers who have experienced a relevant service of sharing economy business related to space
sharing, traffic sharing, object sharing, experience sharing, etc. at least once in the last 6 months using
a convenience sampling method, and the main survey was conducted during May 1-30, 2018. Data
collection was performed through an online survey company. Questionnaires were distributed through
an online and mobile sharing economy community bulletin boards and personal email with prior
consent, and the responses were received by e-mail. Survey data were obtained from the total of 420
respondents and relevant data of 400 respondents, which are without missing values, were used for
data analysis.
By way of data analysis, SPSS Ver.23.0 statistical package was used for the frequency analysis of
the general characteristics of the sample and reliability and validity testing on internal consistency in
the present study. In addition, AMOS Ver.23.0 statistical package was used to perform measurement
model analysis and path analysis. The relevant analyses are conducted based on the following
procedures. (1) Before evaluating the measurement model, Cronbach’s α coefficient, which verifies the
internal consistency of each research construct, is calculated and presented. (2) In the present study,
path analysis is conducted according to the following two stages. In the first stage, exploratory
factor analysis and confirmatory factor analysis are used to evaluate the measurement model.
Further, a correlation analysis is performed on all the research constructs in order to verify the
discriminant validity. In the second stage, path analysis is performed based on the evaluation results
of the measurement model. (3) Based on the above path analysis results, the research problem is
Sustainability 2019, 11, 729 9 of 19

verified by taking into consideration the differences in the analysis results of each model for each
measurement factor.

4. Research Findings and Discussions

4.1. Demographic Characteristics of Research Subjects

The demographic characteristics of the participants were as follows: Gender was equally
distributed with 52.0% (208 participants) male and 48.0% (192 participants) female; participants in their
20s were 35.8% (143 participants), 30s were 34.5% (138 participants), 40s were 19.7% (79 participants),
50s were 9.3% (37 participants), and 60s or older were 0.7% (3 participants). In terms of marital
status, 50.0% (200 participants) were unmarried and 50.0% married. For the highest level of education,
the highest number of participants were in college/college graduate with 80.3% (321 participants),
followed by 8.3% (321 participants) in graduate school or higher, 5.5% (22 participants) in high
school graduate or less, and 5.3% (21 participants) in community college or graduate. In terms of
occupation, the highest number of participants were office workers at 33.0% (132), followed by students
at 13.3% (53 participants), professionals at 12.3% (49 participants), housewives at 9.3% (37 participants),
managers at 8.5% (34 participants), technicians at 5.8% (23 participants), public officials at 5.8%
(23 participants), others at 5.8% (23 participants), unemployed at 3.5% (14 participants), and sales
and service workers at 3.0% (12 participants). In terms of average monthly household income in
Korean Won (KRW) [in U.S. dollar], 40.0% (160 participants) earned 3 million − less than 5 million
KRW [$2,788.10 − less than $4,646.84], 24.8% (99 participants) earned 5 million − less than 7 million
KRW [$4,646.84 − less than $6,505.58], 15% (60 participants) earned 1 million − less than 3 million
KRW [$929.37 − less than $2,788.10], 10.8% (43 participants) earned 7 million − less than 9 million
KRW [$6,505.58 − less than $8,364.31], 8% (32 participants) earned 9 million KRW or higher [$8,364.31
or higher], and 10.5% (six participants) earned under 1 million KRW [under $929.37]. The types
of main sharing economy businesses were items sharing (such as clothes, tools, and books) 38.8%
(155 participants), transportation sharing (such as automobile and carpool) 26.5% (106 participants),
space sharing (such as lodge, office, and meeting room) 25.5% (102 participants), experience sharing
(such as knowledge and skills) 8.0% (32 participants), and money sharing (such as cloud funding and
loan) 1.3% (five participants).

4.2. Reliability and Validity Test

Before the evaluation of measurement models, Cronbach’s α coefficient, which is a method of
testing the internal consistency, was calculated for each research construct to review the reliability.
First, factor analysis using Varimax rotation of 19 items that explains factors related market orientation
extracted six factors with eigenvalues 1.0 or higher, which were ‘consumer orientation (three items),”
“competitor orientation (three items),” “functional coordination (three items),” “creation of market
information (four items),” “exchanging market information (three items),” and “response to market
information (three items)” as shown in Table 1. The total variance explained by these six factors was
72.442%, and showed a high reliability with all Cronbach’s α coefficients equal to or greater than 0.733.
In addition, factor analysis using Varimax rotation of seven items that explains marketing innovation
factors extracted two factors of “product innovation (four items)” and “communication innovation
(three items)” with eigenvalues 1.0 or higher as shown in Table 2. The total variance explained by these
two factors was 67.091%, and showed a high item reliability with all Cronbach’s α coefficients equal to
or greater than 0.772. On the other hand, Table 3 shows the results of unidimensionality tests of each
variable of sustainable competitive advantage and performance of sharing economy business, and the
factor loading of each factor was 0.825 or greater. The reliability of each factor was found to be high
with 0.787 or higher.
Sustainability 2019, 11, 729 10 of 19

Table 1. Reliability and validity analysis of market orientation factors.

Cronbach’s
Variables Items Eigenvalues Component Variance
α
- Sharing economy services should
reflect customer responses to service 0.827
Consumer
development. 2.353 16.918 0.733
orientation
- Sharing economy services should
Cultural link customer information with 0.826
market service development.
orientation - In sharing economy services,
understanding customer needs are 0.777
important as a competitive factor.
- Sharing economy services need to
understand and share competitors’ 0.879
Competitive
strategies. 2.338 14.656 0.822
orientation
- Sharing economy services should
attach great importance to
competitors’ strengths and 0.853
weaknesses and reflect them in the
service.
- Sharing economy services should
reflect the strategic behavior of 0.845
competitors.
- Sharing economy services should
promptly adjust differences in 0.878
Functional
opinions between service and user. 1.783 11.686 0.813
coordination
- Sharing economy services should
share the value and experience
0.848
information between service and
user.
- Sharing economy services should
establish policies between service 0.833
and user.
- Sharing economy services should
make continuous efforts to identify 0.848
Market
the potential desires of users.
information 3.005 11.063 0.82
- Sharing economy services should
generation
reflect users’ desires that cannot be 0.803
Behavioral
expressed in service development.
market
- Sharing economy services should
orientation
make efforts to find opportunities in
0.801
the attribute that users have
difficulty expressing it.
- Sharing economy services should
always think about new trends 0.771
regarding user’s service preferences.
- Sharing economy services should
freely share information on
Market 0.856
success/failure cases about shared
information 2.066 10.115 0.743
value service.
exchange
- Sharing economy services should
always monitor the level of
0.823
information that satisfies users’
desire.
- Sharing economy services need to
improve products/ services suitable 0.761
for the market.
- Sharing economy services should
Response to measure user satisfaction 0.89
market systematically and regularly. 1.956 8.005 0.828
information - Sharing economy services should
either rapidly reestablish or adjust 0.889
strategies when the market changes.
- Sharing economy services should
rapidly perform strategic alternatives 0.807
according to environmental changes.
Sustainability 2019, 11, 729 11 of 19

Table 2. Reliability and validity analysis of marketing innovation factors.

Cronbach’s
Variables Items Eigenvalues Component variance
α
- Sharing economy services
should actively present 0.808
Product
innovative new product ideas.
(service) 2.486 35.509 0.82
- Sharing economy services
Marketing innovation
should respond quickly to 0.772
innovation
market demands.
- Sharing economy services
should actively develop new 0.753
products (services).
- Sharing economy services
should actively embrace 0.614
user-centered pricing policies.
- Sharing economy services
should have an active promotion 0.834
Communication
that can express the value. 2.211 31.582 0.772
innovation
- Sharing economy services
should integrate various
0.817
distribution channels for users to
easily access them.
- Sharing economy services
should have horizontal 0.638
communication with consumers.

Table 3. Reliability and validity analysis of single factor.

Cronbach’s
Variables Items Eigenvalues Component Variance
α
- Sharing economy services should
continuously have resources that
Sustainable 0.864
can give them a competitive
competitive 2.156 35.941 0.81
advantage in the market.
advantage
- Sharing economy services should
develop the factors of competitive
0.851
advantage so that competitors
cannot easily imitate.
- The competitive advantage of
sharing economy services should be 0.839
sustained in the market.
- Sharing economy services should
have higher market share than 0.85
Performance competitors. 2.154 35.904 0.787
- Sharing economy services should
provide better value than 0.837
competitors.
- Sharing economy services should
have better brand image than 0.825
competitors.

4.3. Confirmatory Factor Analysis

The results of confirmatory factor analysis are shown in Table 4 below. The measurements of
unstandardized coefficient, standardized coefficient, standard error (SE), error variance, critical ratio
(CR), construct reliability, and average variance extracted (AVE) value showed that construct validity
was secured with all standardized coefficients equal to or greater than 0.6. Convergent validity was
considered to be secured since all AVE values were 0.5 or greater. Internal consistency and convergent
validity were also considered to be secured since all construct reliability values were 0.7 or greater.
The present study estimated the goodness of fit and parameters of the path analysis through the
maximum likelihood method, and the goodness of fit indices of the path analysis for the behavioral
Sustainability 2019, 11, 729 12 of 19

intention of sharing economy business were X2 = 534.770 (df = 8, p = 0.002), GFI = 0.934, AGFI = 0.943,
RMR = 0.074, NFI = 0.949, CFI = 0.926, and RMSEA = 0.037.

Table 4. Confirmatory factor analysis results.

Measurement Unstandardized Standardized Construct

SE CR AVE
Item Coefficient Coefficient Reliability
Cultural Market Orientation
Consumer orientation
1 1.000 0.688 - -
2 0.998 0.833 0.057 19.066 0.775 0.680
3 0.841 0.776 0.045 15.286
Competitive orientation
1 1.000 0.787 - -
2 0.908 0.810 0.043 14.590 0.907 0.714
3 0.884 0.750 0.037 11.575
Functional coordination
1 1.000 0.778 - -
2 0.894 0.772 0.046 15.484 0.857 0.707
3 0.851 0.776 0.035 11.742
Behavioral Market Orientation
Market information generation
1 1.000 0.782 - -
2 0.890 0.728 0.062 15.706
0.884 0.769
3 0.879 0.713 0.043 10.957
4 0.819 0.763 0.033 8.329
Market information exchange
1 1.000 0.796 - -
2 0.860 0.763 0.064 20.123 0.779 0.666
3 0.710 0.752 0.040 13.594
Response to market information
1 1.000 0.713 - -
2 0.992 0.781 0.049 16.441 0.916 0.695
3 0.767 0.807 0.027 9.133
Marketing Innovation
Product innovation
1 1.000 0.772 - -
2 0.951 0.823 0.056 14.175
0.878 0.781
3 0.792 0.778 0.052 13.191
4 0.745 0.775 0.030 7.567
Communication innovation
1 1.000 0.805 - -
2 0.959 0.789 0.054 18.302 0.796 0.685
3 0.785 0.794 0.038 12.896
Sustainable Competitive Advantage
1 1.000 0.794 - -
2 0.956 0.856 0.044 14.739 0.854 0.713
3 0.917 0.797 0.038 12.783
Performance
1 1.000 0.866 - -
2 0.969 0.809 0.066 16.569
0.811 0.779
3 0.864 0.826 0.045 11.255
4 0.724 0.749 0.041 10.419
SE = Standard error; CR = Critical ratio.
Performance
1 1.000 0.866 - -
2 0.969 0.809 0.066 16.569
0.811 0.779
3 0.864 0.826 0.045 11.255
4 2019, 11, 729
Sustainability 0.724 0.749 0.041 10.419 13 of 19
SE = Standard error; CR = Critical ratio.

4.4.
4.4. Research
Research Hypothesis
Hypothesis Testing
Testing
The
The test
testresults
resultsofof
research hypothesis
research of the
hypothesis of structural modelmodel
the structural for thefor
relationship betweenbetween
the relationship market
orientation and performance of sharing economy business are presented in Figure 2 and
market orientation and performance of sharing economy business are presented in Figure 2 and Table Table 5.
The testtest
5. The results of each
results research
of each hypothesis
research were
hypothesis as follows.
were as follows.

Figure 2. Research results model.

The findings of the present study were as follows. First, the analysis results of the path relationship
between cultural market orientation of sharing economy business and marketing innovation showed
that product innovation was significantly influenced by consumer orientation (β = 0.313, CR = 4.453, p
= 0.000) and functional coordination (β = 0.188, CR = 2.582, p = 0.010), respectively, while the influence
of competitive orientation on product innovation was not significant (β = 0.070, CR = 1.036, p = 0.301).
Even though competitive orientation (β = 0.266, CR = 4.035, p = 0.000) and functional coordination
(β = 0.337, CR = 4.769, p = 0.000) had a significant influence on communication innovation, the
influence of consumer orientation on communication innovation (β = 0.003, CR = 0.041, p = 0.967)
was not significant. Second, the analysis results of the path relationship between the behavioral
market orientation of sharing economy business and marketing innovation showed that product
innovation was significantly influenced by market information generation (β = 0.429, CR = 5.883, p
= 0.000) and response to market information (β = 0.346, CR = 4.893, p = 0.000), respectively, while
the influence of market information exchange on product innovation was not significant (β = 0.092,
CR = 1.296, p = 0.196). In addition, market information exchange (β = 0.413, CR = 5.457, p = 0.000)
and response to market information (β = 0.216, CR = 2.862, p = 0.005) had a significant influence
on communication innovation, but the influence of market information generation (β = 0.002, CR =
0.022, p = 0.982) on communication innovation was not significant. Third, the analysis results of the
path relationship between the marketing innovation of sharing economy services and a sustainable
competitive advantage showed that a sustainable competitive advantage was significantly influenced
by product innovation (β = 0.490, CR = 10.579, p = 0.000) and communication innovation (β =
0.382, CR = 8.240, p = 0.000). Fourth, the analysis results of the path relationship between the
sustainable competitive advantage (SCA) of sharing economy business and market power showed
that a sustainable competitive advantage had a significant influence on market power (β = 0.638, CR =
14.031, p = 0.000).
Sustainability 2019, 11, 729 14 of 19

Table 5. Results of the research hypothesis test.

Type Pathway Estimate SE CR p-Value Result

H1-1-1 Consumer orientation → Product innovation 0.313 0.070 4.453 0.000 Accept
H1-1-2 Competitive orientation → Product innovation 0.070 0.068 1.036 0.301 Reject
H1-1-3 Functional coordination → Product innovation 0.188 0.073 2.582 0.010 Accept
H1-2-1 Consumer orientation → Communication innovation 0.003 0.068 0.041 0.967 Reject
H1-2-2 Competitive orientation → Communication innovation 0.266 0.066 4.035 0.000 Accept
H1-2-3 Functional coordination → Communication innovation 0.337 0.071 4.769 0.000 Accept
Market information
H1-3-1 → Product innovation 0.429 0.073 5.883 0.000 Accept
generation
Market information
H1-3-2 → Product innovation 0.092 0.071 1.296 0.196 Reject
exchange
Response to market
H1-3-3 → Product innovation 0.346 0.071 4.893 0.000 Accept
information
Market information
H1-4-1 → Communication innovation 0.002 0.078 0.022 0.982 Reject
generation
Market information
H1-4-2 → Communication innovation 0.413 0.076 5.457 0.000 Accept
exchange
Response to market
H1-4-3 → Communication innovation 0.216 0.075 2.862 0.005 Accept
information
Sustainable competitive
H2-1 Product innovation → 0.490 0.046 10.579 0.000 Accept
advantage
Communication Sustainable competitive
H2-2 → 0.382 0.046 8.240 0.000 Accept
innovation advantage
Sustainable competitive
H3 → Performance 0.638 0.045 14.031 0.000 Accept
advantage
SE = Standard error; CR = Critical ratio.

The results of the present study were as follows. First, the significant relationship between
consumer orientation and product innovation of H1-1-1 is supported by the finding of Narver
et al. [15], who reported that in terms of the relationship between cultural market orientation
and product innovation, the customer orientation that is based on desires that consumers were
unable to express is highly likely to link to innovation if the firm has deep insight into customers.
The significant relationship between functional coordination and product innovation of H1-1-3 is
supported by Morgan et al. [71], who reported that the marketing capability of an organization
can be strengthened by increasing the organization’s responsiveness to market changes. Second,
in terms of the relationship between cultural market orientation and communication innovation,
activities to cope with competitor’s movement will increase the firm’s flexibility [72] and flexibility in
marketing strategies compared to competing organizations, which will improve capabilities to develop
products and service brands according to market information, and to maintain good relationships
with customers and communicate with them [44]. Weerawardena and O’Cass [13] stated that it will
result in accelerating innovation in the innovation process. It supports the significant relationship
between competitive orientation and communication innovation of H1-2-2. The significant relationship
between functional coordination and communication innovation of H1-2-3 is supported by Martin
and Grbac [73], who reported that communication with customers should be considered important to
continuously maintain good relationships with customers to create effective organizational capabilities.
Third, the significant relationship between market information generation and product innovation
of H1-3-1 is supported by the findings of Slater and Mohr [74], who stated that market creation
orientation based on potential desires will increase meaningful innovations for future customers in
terms of the relationship between behavioral market orientation and product innovation, and the
findings of Kirca et al. [59], who reported that market orientation not only improves consumers’ quality
perception, loyalty, and customer satisfaction, but also positively influences innovation and new
product success. The significant relationship between response to market information and product
innovation of H1-3-2 is supported by the report of Yang [75], who stated that a high market response
of the firm will positively influence marketing innovation because the firm can satisfy future desires
that customers are unable to express. Fourth, the significant relationship between market information
exchange and communication innovation of H1-4-2 is supported by Kirca et al. [59], who reported
that in terms of the relationship between cultural market orientation and communication innovation,
Sustainability 2019, 11, 729 15 of 19

an organization with high market orientation will build marketing capabilities that can effectively
create and exchange market information. The significant relationship between the response to market
information and communication innovation of H1-4-3 is supported by previous studies reporting
the organization’s decision making to respond to market changes based on special information is
important because it has to respond sensitively to customers’ demands [76], and furthermore, market
response to meet customer desires and to detect and cope with competitor’s behavior will accelerate
innovation for the development of new marketing mix [75]. In other words, the more the market
response is strengthened, the more the firm will try to meet customers’ expressed desires; such desires
basically require a different response from the existing marketing mix. Fifth, the significant relationship
between product innovation and a sustainable competitive advantage of H2-1 is supported by previous
studies reporting that in terms of the relationship between product and communication innovation
and a sustainable competitive advantage, product and service innovation is considered as a strategic
competitive advantage [77], and differentiation of services (products) becomes an important source
that can ultimately occupy a competitive advantage in the market [78]. Marketing innovation in
the relationship between industrial customers improves the competitiveness of a firm by improving
negotiation capabilities through communication and lowering interdependence [42]. Such findings
support the significant relationship between communication innovation and sustainable competitive
advantage of H2-2 in the present study. Sixth, the significant relationship between a sustainable
competitive advantage and the performance of H3 in the present study is supported by previous
studies [8,30] reporting that in terms of the relationship between sustainable competitive advantage
and performance, the firm’s performance becomes better over time when competitive advantage is
continuously maintained in the market.

5. Conclusions
Market orientation is the tendency of organizational activities to respond to the market demand
better than competitors and to predict market changes well to create a sustainable competitive
advantage and high profits. The present study identified the market orientation of sharing economy
business from cultural and behavioral perspectives, and investigated it in terms of the structural
relationship between marketing innovation, sustainable competitive advantage, and performance
(market power). Such sharing economy business with high market orientation is expected to utilize
opportunities derived from the market and improve service development to meet the desires of the
target market.
The marketing implications of the present study are as follows. First, to increase product
innovation, sharing economy service needs to reflect customers’ responses in service development,
link customer information with service development, increase customer orientation that says the
understanding of customer demands is important as a competitive factor, rapid coordination of
differences between service and user, share values and experience information between service and
user, and a functional coordination method between service and user. Sharing economy service has
to make continuous efforts to identify user’s potential desires, reflect desires that users are unable
to express in service development, make efforts to find opportunities in the attribute that users have
difficulty expressing, and generate market information through concerns about new trends in the
service that users may prefer. Furthermore, sharing economy services should measure user satisfaction
systematically and regularly, either rapidly reestablish or adjust strategies when the market changes,
and actively respond to market information by rapidly performing strategic alternatives according to
environmental changes. Second, to increase communication innovation, sharing economy service needs
to understand and share competitors’ strategies, attach great importance to competitors’ strengths
and weaknesses and reflect them in service, increase competitive orientation by reflecting competitors’
strategic behavior in service, rapidly coordinate differences between the service and user, share values
and experience information, and functional coordination between the service and user. Sharing
economy services should freely share information on success/failure cases about shared value service,
Sustainability 2019, 11, 729 16 of 19

monitor the level of information that satisfies users’ desire, activate market information exchange
by improving products/services suitable for the market, measure user satisfaction systematically
and regularly, either rapidly reestablish or adjust strategies when the market changes, and actively
respond to market information that requires prompt execution of strategic alternatives according to
environmental changes. Third, to increase a sustainable competitive advantage, a sharing economy
service should actively present innovative new product ideas, respond quickly to market demands
and actively develop new products (services), and improve product innovation that actively embraces
user-centered pricing policies. Sharing economy services should also have an active promotion
that can express value, integrate various distribution channels for users to easily access them, and
increase communication innovation that has horizontal communication with consumers. Fourth, for
sharing economy services to increase market power that has a higher market share, superior quality,
and brand image than competitors, sharing economy services should continuously have resources
that can be a competitive advantage in the market, develop competitive advantage elements which
competitors cannot imitate, and pursue sustainable competitive advantage strategies that must be
continuously maintained.
Through these implications, it has been suggested that the detailed application of the market
orientation of sharing economy business of the present study at the working-level can be the driving
force that can create new shared value, a sustainable competitive advantage, and performance in
combination with marketing innovation characteristics. Various factors and relationships that were
not considered in the present study, however, need to be identified by steps systematically in the
future. Research is necessary to expand variables related to marketing innovation of sharing economy
business to the aspects of cost, sales, and distribution. Since the present study was focused on the scope
of the utilization of integrated sharing economy products and services, the generalization of specific
types of sharing economy businesses is difficult. Accordingly, research that includes characteristic
factors of a specific type of sharing economy business is necessary to identify the performance of more
valid sharing economy business and the differentiation of its influence.

Author Contributions: Y.K.N. and S.K. both wrote the paper and designed the survey. Y.K.N. contributed to the
writing of the paper and conducted the survey and data analysis. S.K. suggested research ideas and contributed
to the writing and revision of the paper. H.Y.J. assisted in conducting the survey and data analysis.
Funding: This work was supported by the Ministry of Education of the Republic of Korea and the National
Research Foundation of Korea (NRF-2016S1A5A2A03926167).
Conflicts of Interest: The authors declare no conflict of interest.

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