The Role of Marketing in today's Enterprises: A Cross-Cultural Comparison -- Research Study by Dr....

Research Study: The Role of Marketing in Today’s Enterprises – A Cross-Cultural Comparison

© Dr. Sven Tuzovic │ Associate Professor │Pacific Lutheran University < 1 >

What is the Role of

in today’s Enterprises?A Cross-Cultural Comparison

Dr. Sven Tuzovic, Associate Professor



Introduction

Definition

Research Objectives

Literature Review

Conceptual Framework

Hypotheses

Methodology

Our Sample

Results

Findings and Conclusions

1

2

3

4

5

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7

8

9

10



Introduction



The influence of marketing departments has received much

attention in both the

popular press and academic literature



Claim: “MARKETING has lost its

strategic role”

Sources: Murphy 2005; Sheth and Sisodia 2005



According to a global survey among

1,200 CEOs, 80% ranked marketers low in the

hierarchy of their organizations’ executive committees

Source: Lukovitz 2012



… or, even worse, CEOs did not include

them at all !

Source: Lukovitz 2012



And, in addition, 64% of “marketer-unhappy” CEOs have removed critical responsibilities from marketing’s traditional core functions, e.g.,

product development, pricing, etc.Source: Lukovitz 2012



Yet, “many statements aboutthe role of MARKETING in

modern firms remain

anecdotal and

journalistic”

Source: Verhoef and Leeflang 2009, p. 15



Definition



Terminology in the literature varies:

role power

emphasis

influence



We define MARKETING’s role as:

The influence of the marketing department

on a firm’s strategic decision making



Research Objectives



We investigate:the role of marketing departments

of firms headquartered in the

United States, Europe and Asia



We contrast:the role of marketing among

Eastern and Western (i.e., American and European) firms



Literature Review



Author(s) and Year

Research Focus Theory and Framework

Unit of Analysis, Sample Size and Country(ies)

Sectors Key Findings

Homburg et al. (1999)

Influence of the marketing department

Contingency theory, institutional theory

SBU level;n=72;USA and Germany

Consumer packaged goods, electrical equipment and machinery

External contingency factors (i.e., competitive strategies) and institutional variables (i.e., marketing background of the CEO and the type of industry) are positively related to marketing department’s influence.

Moorman and Rust (1999)

Role and value of the marketing function

Conceptual framework building on extensive literature review

SBU level;n=330;USA

B2B vs. B2C The marketing function contributes to firm performance beyond the variance explained by a firm’s market orientation.

Götz et al. (2009)

Role of marketing and sales departments

Contingency theory

SBU level;n=153;Germany

Automotive, electronics, cosmetics, food and banking

Marketing department’s power amplifies (i.e., moderates) the relationship between market orientation and firm performance.

Verhoef and Leeflang (2009)

Determinants of marketing’s influence and impact on firm performance

Conceptual framework building on literature review

Firm level;n=213;The Netherlands

B2B vs. B2C; services vs. goods

Market orientation mediates the link between a marketing department’s influence and firm performance.

Accountability and innovation are key antecedents of a marketing department’s influence.

Actual decisional influence of the marketing department is limited to segmentation, targeting and positioning, advertising, and customer relationship management.



Author(s) and Year

Research Focus Theory and Framework

Unit of Analysis, Sample Size and Country(ies)

Sectors Key Findings

Engelen and Brettel (2011)

Moderating effects of three national cultural dimens-ions on relation-ship between marketing department’s capabilities and Its influence

Conceptual framework based on Verhoef and Leeflang (2009)

Firm level;n=740;3 Western (Austria, Germany, USA), 3 Asian (Hong Kong, Thailand, Singapore) countries

Financial services, consumer goods, utilities, chemical,automotive, and machinery/ electronics

Accountability has no impact on the marketing department’s influence in Asian countries, contradicting previous findings for Western countries.

Innovativeness and customer connecting are positively related to the influence of the marketing department across cultural contexts.

Lee et al. (2011)

Marketing program implementation

Resource-based view, dynamic capabilities theory

SBU level;n=269;USA

Retailing Marketing program implementation has a positive direct effect on firm performance.

Merlo (2011)

Marketing department’s influence from a power perspective

Power theory

SBU level;n=122;Australia

Manufacturing Marketing subunits can strengthen their role by employing different types of power.

Market turbulence can lead to greater influence of the marketing department within the firm.

Verhoef et al. (2011)

Replication of Verhoef and Leeflang (2009)

Conceptual framework based on Verhoef and Leeflang (2009)

7 industrialized nations (USA, 5 European countries and Australia)

As in Verhoef and Leeflang (2009)

Firms in industrialized countries should have strong marketing departments.

The presence of a CEO with a marketing background is positively related to a marketing department’s influence.

Competitive strategies are not consistently related to a marketing department’s influence.



Common weakness of previous studies:

• Often only single-country data • Lack of cross-cultural comparison



Conceptual Framework



Marketing department’s influence

within the firm

Firmperformance

H6 (+)

Firm characteristics

Background of CEO

H2 (+)

H3 (+)

H4 (-)

H5 (+)

H1 (+)Responsibilities

Resources

Marketing departmentcharacteristics

Differentiation

Low-cost

Competitive strategy

Market Orientation

H7a (+) H7b (+)

Contextual moderators

Firm size Geographical region Organizational structure



Hypotheses



H1 The greater the marketing department’s responsibilities in a firm, the greater the department’s influence in the firm.

H2 The greater the marketing department’s level of resources in a firm, the greater the department’s influence in the firm.

H3 A differentiation strategy is related positively to a marketing department’s influence within a firm.

H4 A low-cost strategy is related negatively to a marketing department’s influence within a firm.

H5 The marketing department has a stronger influence in firms in which the CEO has a marketing background compared to firms in which the CEO does not have a marketing background.

H6 The greater the marketing department’s influence in a firm, the better the firm’s performance.

H7 The greater the marketing department’s influence in a firm, the higher its market orientation, which in turn improves firm performance.



Methodology



• Online survey

• Pre-tested with MBAs

• 7-point Likert scales, anchored by 1 = strongly disagree and 7 = strongly agree



• Emails sent to approximately 2,930 MBA / EMBA alumni in USA, Europe and Asia

• 580 individuals participated (response rate of 19.8%)

• Final sample: n = 312(We excluded respondents who did not complete the entire survey as well as few respondents from Africa and Australia)



Measures:• Adopted from existing literature• Reflective scales • Formative scales for Marketing’s

responsibilities and resources• Single-item measure used to

capture background of the CEO



Moderators:• Geographical region • Firm size • Organization of the

marketing function



Our Sample



Industry %Advertising/PR/Comm. 2.5Automotive 2.5Construction 1.5Consulting 7.7Consumer packaged goods 4.3Financial services 9.9Healthcare/Pharmaceutical/Life Science 7.7Hospitality/Tourism 5.9Manufacturing 8.0Marine & Shipping 0.9Oil & Gas 1.5Public Service 2.8Real Estate/Property 1.5Telecommunications/IT 10.8Other 32.2



Position of respondent %President/CEO 11.6Other C-level (e.g. CFO, CMO) 7.2SVP 3.4VP 10.0Director 17.2Head of Department 11.3Senior Manager 12.2Manager 13.5Other 13.5

Years of service in firm0-3 21.94-6 21.97-11 21.612-20 23.5More than 20 11.0



Annual revenue %< $25 million 22.9$25 million-$49 million 5.7$50 million-$99 million 4.5$100 million-$199 million 5.1$200 million-$499 million 11.1$500 million-$999 million 9.2> $1 billion 41.4

Number of employees1-499 29.4500- 999 6.51,000 – 9,999 19.810,000 – 49,999 19.250,000 – 99,999 11.8> 100,000 13.3



Location of firm’s headquarters %Africa/Middle East 1.9Asia 45.9Australia/Oceania 1.9Europe 26.1North America 24.2South America /

Organization of marketing functionCorporate function 43.6Business unit level 31.0Brand/product level 16.0Field offices 9.3



Results



Statistical Results



Results of Structural Equation Modeling



Multi-group Analysis – by Region

Market Orientation


within the firm

Firmperformance

Differentiation

Low-cost

Responsibilities

Resources

Background of CEO

.44*** | .34***

.42*** | .27**

-.08 | -.03

.01 | .23**

.10* | .10

.26** | .03

.34*** | .27** .23** | .38**

Notes:

Coefficient 1 = USA/Europe; Coefficient 2 = Asia

The path coefficient pairs in italics and underlined font are significantly different at *p ≤ 0.05, **p ≤ 0.01, ***p ≤ 0.001 (two-tailed)



Multi-group Analysis – by Company Size

Market Orientation


within the firm

Firmperformance

Differentiation

Low-cost

Responsibilities

Resources

Background of CEO

.46*** | .27**

.19* | .52***

-.05 | -.02

.09 | .08

.14* | .08*

.16* | .14

.29*** | .34*** .28** | .33***

Notes:

Coefficient 1 = Small firms; Coefficient 2 = Large firms

The path coefficient pairs in italics and underlined font are significantly different at *p ≤ 0.05, **p ≤ 0.01, ***p ≤ 0.001 (two-tailed)



Findings and Conclusions



Finding 1:Our study provides empirical evidence that an influential

MARKETING department has a positive influence on firm

performance both directly and indirectly via market orientation



Finding 2:The role of MARKETING in Western and Eastern firms is

significantly different



West vs. East:In the West, a marketing

department’s influence affects firm performance both directly and

indirectly (via market orientation), whereas this relationship is fully mediated among Eastern firms



In conclusion:

An influential marketing department

improves a firm’s

performance



Contact Information



Dr. Sven TuzovicAssociate Professor

Email: [email protected]

LinkedIn: www.linkedin.com/in/drstuz

ResearchGate: www.researchgate.net/profile/Sven_Tuzovic

mailto:[email protected]

http://www.linkedin.com/in/drstuz

http://www.researchgate.net/profile/Sven_Tuzovic



Citation:

Jochen Wirtz, Sven Tuzovic, Volker Kuppelwieser (2014)

“The role of marketing in today’s enterprises”

Journal of Service Management

Vol. 25, No. 2, pp. 171-194

http://www.emeraldinsight.com/doi/abs/10.1108/JOSM-01-2014-0037











References and Image CreditsSources:Lukovitz, K. (2012), “Survey probes the ‘CEO-marketer divide’”, Marketing Daily, 15 November.Murphy, D. (2005), “The click in the bricks”, Research World, November, pp. 29-30.Sheth, J.N. and Sisodia, R.S. (2005), “A dangerous divergence: marketing and society”, Journal of Public Policy and Marketing, Vol. 24 No. 1,

pp. 160-162.Verhoef, P.C., Leeflang, P.S.H., Reiner, J., Natter, M., Baker, W., Grinstein, A., Gustafsson, A., Morrison, P. and Saunders, J. (2011),

“A cross-national investigation into the marketing department’s influence within the firm: toward initial empirical generalizations”, Journal of International Marketing, Vol. 19 No. 3, pp. 59-86.

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