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Dispersion of marketing capabilities: impact on marketing’s influence and business unit outcomes

  • Original Empirical Research
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Abstract

The marketing function of firms continues to evolve into many configurations, including the dispersion of marketing capabilities. This study evaluates the effects on the marketing function’s influence when marketing capabilities are dispersed across multiple boundaries. Using a sample of marketing executives, we study the effects of two forms of marketing capabilities dispersion: intra-organizational dispersion and inter-organizational dispersion. We examine the impact of these forms on marketing’s perceived influence within the firm. We also investigate marketing’s influence on customer responsiveness, along with three distal outcomes: marketing strategy implementation success, relationship portfolio effectiveness, and business unit performance. Our findings reveal that marketing’s influence may actually heighten or diminish, depending on the form of marketing capability dispersion. Further, we contribute to findings regarding marketing’s influence on business unit performance. The results provide a new lens for scholars to view and measure marketing dispersion and offer guidance to practitioners.

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Notes

  1. To determine if there were any industry specific effects, we examined the difference in our model variables between the service and manufacturing industries. Since there were no significant differences, we did not model industry type as a control variable.

  2. At a reviewer’s request, we grouped the capabilities into architectural and specialized marketing capabilities (cf. Morgan, Kaleka, and Katsikeas 2004) and examined their differential effects on marketing’s perceived influence. We found no significant differences in effects.

  3. In a buffering interaction, the two predictor variables have coefficients that are opposite in sign and an interaction term that is positive (Cohen et al. 2003, pp. 285–286)

  4. We thank the anonymous reviewers for many of these thoughts.

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Acknowledgments

The authors thank the Institute for the Study of Business Markets and their Doctoral Dissertation Award, as well as the Marketing Department at the University of Nebraska-Lincoln, for supporting this research.

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Authors and Affiliations

  1. Department of Management and Marketing, College of Business, North Dakota State University, 316 Richard H. Barry Hall, 811 2nd Avenue North, Fargo, ND, 58108-6050, USA

    Michael T. Krush

  2. College of Business Administration, University of Nebraska-Lincoln, Lincoln, NE, 68588, USA

    Ravipreet S. Sohi & Amit Saini

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  1. Michael T. Krush
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Correspondence to Michael T. Krush.

Appendix

Appendix

Marketing Capabilities Dispersion

Description of each capability based on Vorhies and Morgan ( 2005 ), was provided in the questionnaire.

Intra-Organizational Dispersion Seven-point Likert scale; No Extent, High Extent

To what extent do non-marketing employees from other departments and internal divisions contribute to:

Inter-Organizational Dispersion Seven-point Likert scale; No Extent, High Extent

To what extent do independent organizations, such as consultants, agencies and other firms contribute to the unit’s:

1.Marketing information management capability

4.Product development capability

2.Channel management capability

5.Pricing capability

3.Marketing communication capability

6.Marketing planning capability

Perceived Influence of Marketing

Adopted from Moorman and Rust ( 1999 ); Verhoef and Leeflang ( 2009 )

Seven-point Likert scale; Strongly agree; Strongly disagree

In our business unit, the marketing department (function):

Is considered more influential than other departments

Tends to dominate other departments in decision making

Is considered more important than other functions by the unit’s management

Customer Responsiveness

Based on the Likert scale of Homburg et al. ( 2007 ).

Seven-point Semantic differential scale

The business unit’s responsiveness to customers:

Rapidly responds to their needs/ Slowly responds to their needs*

Slowly implements customer initiatives/ Quickly implements customer initiatives

Sensitive to customers’ desired outcomes /Insensitive to customers’ desired outcomes*

Rapidly reacts to their changing needs/ Slowly reacts to their changing needs*

Marketing Strategy Implementation Success

Based on the Likert scale of Noble and Mokwa ( 1999 )

Seven-point Semantic differential scale

The business unit’s overall implementation success of marketing strategies

Considered best in industry /Considered worst in industry*

Worse than major competitors/ Better than major competitors

Acceptable for business unit/ Unacceptable for business unit*

Exemplified mediocrity/Exemplified excellence

Exemplified effectiveness/Exemplified ineffectiveness*

Relationship Portfolio Effectiveness

Based on Johnson et al. ( 2004 );

Seven-point Semantic differential scale

In general, the majority of relationships with your business customers.

Inefficient /Efficient

Productive/ Unproductive (*)

Unsatisfactory /Satisfactory

Effective/ Ineffective (*)

Business Unit performance

Adapted from Vorhies and Morgan (2005)

Seven-point Likert scale; Clearly worse; Clearly better

Relative to your competitors how has your business unit performed in…?

Return on sales (ROS)

Business unit profitability

Return on investment (ROI)

Business Strategy

Scale from Verhoef and Leeflang ( 2009 )

Check one of the following generic Business Strategies that is most applicable to your business unit

Cost leadership: strategy to obtain the lowest costs in the market.

Differentiation: focusing on being better in different features of the product/service that are important to customers.

Cost focus: targeting a relative small segment in the market that is cost-consciousness

Differentiation focus: targeting a relative small segment in the market that desires a unique and good product and that is willing to pay a higher price for this.

Marketing Accountability

Based on Scale from Moorman and Rust ( 1999 ) and Verhoef and Leeflang ( 2009 )

In our business unit, the marketing department (function):

Is effective at linking their activities to financial outcomes

Shows the financial outcomes of their plans

Pays little attention to financial outcomes of their activities*

Marketing Innovativeness

Based on Verhoef and Leeflang ( 2009 )

What is the percentage of introduced new products in the last 5 years that were initiated by the following department?

Please divide 100 points across four departments: (1) R&D, (2) marketing, (3) sales, and (4) other.

The degree of marketing innovativeness was calculated by using the points assigned to marketing department.

Firm Size (employee number)

Based on Homburg et al. ( 2007 )

Less than $25 million=1; $25 to $49 million=2; $50 to $99 million=3; $100 to $199 million=4; $200 to $499 million=5; $500 to $999 million=6; $1 billion to $2 billion=7; More than $2 billion=8

  1. *Reverse coded

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Krush, M.T., Sohi, R.S. & Saini, A. Dispersion of marketing capabilities: impact on marketing’s influence and business unit outcomes. J. of the Acad. Mark. Sci. 43, 32–51 (2015). https://doi.org/10.1007/s11747-014-0420-7

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