The role of market orientation in advertising spending during economic collapse: The case of Turkey in 2001

The authors investigate the role of market orientation in advertising
spending during economic contraction. They use the 2001 economic
collapse in Turkey as the empirical context in which to test hypotheses
regarding why some firms increase their advertising spending in a
contraction period while the majority of firms cut back. Analyzing market
orientation at the level of its intelligence and responsiveness facets, they
find the responsiveness facet to be positively associated with increases
in advertising spending but observe the intelligence facet to be
negatively associated with advertising spending. Importantly, positive
shifts in advertising spending during the economic contraction predict
better subsequent business performance. The opposing roles of the
intelligence and responsiveness facets disappear in a subsequent
economic expansion period. These findings have managerial and
theoretical implications. Firms that nurture the responsiveness facet of
market orientation during economic contractions go against the tide to
increase their advertising spending and experience the performance
benefits that such countercyclical actions can amass.