A longitudinal study of the impact of market structure,firm structure,strategy, and market orientation culture on dimensions of small-firm performance

The purpose of this article is to determine market orientation’s relative impact on small-business performance, compared to other influences, in an integrated model using longitudinal data. Contrary to expectations based on the management literature, the results indicate weak causal relationships between market environment, small-firm structure, and small-firm strategy. The results further indicate weak influences of these variables, but strong and consistent influences of market orientation, on various measures of small-firm performance. Contrary to expectations based on business policy literature, relative product quality and new product success were not significant influences on profitability, perhaps due to the significant influence of market orientation on these variables. In addition, although increases in growth/share had a significant short-term influence on increases in profitability, high levels of previous years’ firm growth/share had a negative influence on current profitability. The previous year’s level of firm coordinating systems and market competitive intensity has a significant impact on the level of small-firm market orientation.     

Environmental marketing strategy and firm performance: Effects on new product performance and market share

Recent studies on marketing and the natural environment have called for research that links environmental marketing strategies to the performance of the firm. This research operationalizes the enviropreneurial marketing (EM) construct and examines its relationship with firm performance. It is the first empirical research to operationalize the EM construct. The new scale, albeit a first attempt, demonstrates encouraging psychometric properties. According to the resource-based view of the firm, a resource such as EM should directly influence firms’ capabilities (e.g., new product development success) but not competitive advantage (e.g., change in market share). A nationwide study of top-level marketing managers supports this perspective. In addition, although market turbulence also affects new product development success, it does not have an impact on EM. This suggests that EM formation is driven by internal rather than external forces. William E. Baker (william.baker@sdsu.edu) is an associate professor of marketing at San Diego State University. His research interests lie primarily in advertising effectiveness, new product success, organizational learning, and market orientation. He has published in leading scholarly journals including theJournal of the Academy of Marketing Science, theJournal of Product and Innovation Management, theJournal of Consumer Psychology, theJournal of Advertising, Psychology & Marketing, and theJournal of Market Focused Management. He has also served as the head of research in a major communications firm and is actively involved in consulting. James M. Sinkula (james.sinkula@uvm.edu) is John L. Beckley Professor of Marketing in the School of Business Administration at the University of Vermont. His research interests lie primarily in the areas of organizational learning, market orientation, product innovation, environmental marketing strategy, and organizational performance. He has published in the leading scholarly journals, including theJournal of Marketing, theJournal of the Academy of Marketing Science, theJournal of Product and Innovation Management, theJournal of Business Research, theJournal of Advertising Research, theJournal of Market Focused Management, theJournal of Business and Industrial Marketing, theJournal of International Marketing, and others.     

Export marketing strategy implementation,export marketing capabilities,and export venture performance

Since exporting is the most popular mechanism by which firms engage with international markets, understanding the drivers of export market performance is key to explaining firms’ international competitiveness. The literature posits that the effective implementation of planned export marketing strategy is a key determinant of the performance of firms operating in international markets. Yet little is known about the specific nature and drivers of export marketing strategy implementation effectiveness. In this study we build on the implementation literature in marketing and strategic management to develop a new conceptualization of export marketing strategy implementation effectiveness. Drawing on dynamic capabilities theory, we empirically examine the export marketing capability antecedents and performance consequences of export marketing strategy implementation effectiveness in the context of manufacturing firms that are exporting to international markets. Results indicate that effective implementation of planned export marketing strategy contributes to export market and financial performance, and that marketing capabilities play an important role in enabling effective marketing strategy implementation in export venture operations.     

The effect of market orientation and its components on innovation consequences: a meta-analysis

While there is a rich body of research on market orientation’s effect on business performance, much little attention has been given to its effect on innovation consequences. This is the first meta-analytic effort to study the independent effects of market orientation components (customer orientation, competitor orientation, interfunctional coordination) on innovation consequences. Also, it is the first meta-analysis to study the impact of contextual characteristics on the way market orientation affects innovation consequences. The study finds that market orientation components positively affect innovation consequences but that competitor orientation’s effect depends on a minimum level of customer orientation. The study also suggests that the relationship between market orientation and innovation consequences is stronger in highly competitive environments but weaker in technology turbulent ones. Finally, findings suggest that the relationship is stronger in large firms, service companies, and in countries characterized by high individualism and high power distance national cultures.

Alliance orientation: Conceptualization, measurement, and impact on market performance

Interfirm collaborations have inspired a rich literature in marketing and strategy during the past two decades. Building on this extant work, the authors developed a new construct, alliance orientation, and explored its influence on firms’ alliance network performance and market performance. The authors drew on data collected from 182 U.S. firms with extensive experience informing, developing, and managing strategic alliances in marketing, new product development, distribution, technology, and manufacturing projects. Using structural equations modeling, the authors demonstrate that alliance orientation significantly affects alliance network performance, which in turn enhances market performance. The findings also suggest that market turbulence exerts a significant moderating influence on the relationship between alliance orientation and alliance network performance, whereas the moderating role of technological turbulence on that relationship does not appear to be significant. The study provides evidence that firms’ alliance orientations positively affect their performance in strengthening their alliance network relationships and in managing conflicts with their alliance partners. Destan Kandemir (kandemir@msn.edu) is a research associate in Center for International Business Education and Research at Michigan State University. She earned her PhD in marketing and international business from Michigan State University. Her articles have appeared in theJournal of Business and Industrial Marketing, Industrial Marketing Management, theJournal of International Marketing, and theJournal of Management. Her research interests include firm resources and capabilities, market-oriented knowledge management, and global alliance management. Attila Yaprak (attila.yaprak@wayne.edu) is a professor of marketing and international business at Wayne State University. He received his PhD from Georgia State University. His research interests include cross-national consumer behavior, global marketing strategy, and international alliances. His research has appeared in theJournal of International Business Studies, theJournal of International Marketing, theJournal of Business Research, andPolitical Psychology, among others. S. Tamer Cavusgil (cavusgil@msu.edu) is University Distinguished Faculty and the John W. Byington Endowed Chair in Global Marketing in the Department of Marketing and Supply Chain Management, Eli Broad Graduate School of Management, Michigan State University.     

Capabilities and financial performance: the moderating effect of strategic type

The Miles–Snow (M–S) strategic typology has continued to receive attention in the academic business press, even though it has been criticized for not making explicit the relationships between strategic type and ultimate profit performance. Using the market orientation and Resource-Based View literature, we develop hypotheses regarding relationships between M–S strategic type and four firm capabilities (technology, information technology, market-linking, and marketing capabilities), relationship between the four capabilities and performance, and the moderating role of M–S strategic type. An empirical test involves multiple data collections from 216 firms. The study results suggest that there are significant relationships between capabilities and performance if one does not account for the moderating role of strategic type. When strategic type is used as a moderating variable, we find that only certain capabilities had significant effects on profitability. For example, technology and information technology capabilities increase financial performance for prospector organizations, while a different set of capabilities (market-linking and marketing) are positively related to financial performance for defender organizations. We discuss how our findings are consistent with the expectations of the Resource-Based View of the firm. We conclude with a discussion of theoretical and managerial implications.

Organizational capabilities in e-commerce: An empirical investigation of e-brokerage service providers

E-commerce not only has tremendous potential for growth but also poses unique challenges for both incumbents and new entrants. By examining drivers of firm performance in e-commerce from a capabilities perspective, the authors conceptualize three firm capabilities that are critical for superior firm performance in e-commerce: information technology capability, strategic flexibility, and trust-building capability. The extent and nature of market orientation is conceptualized as a platform for leveraging e-commerce capabilities. The authors test the effects of e-commerce capabilities on performance (e.g., relative profits, sales, return on investment) using data from 122 e-brokerage service providers. The results indicate that information technology capability and strategic flexibility affect performance given the right market orientation. Amit Saini (asaini2@unl.edu) is an assistant professor of marketing at University of Nebraska-Lincoln. He conducts research in the area of marketing strategy, technology-marketing interface, e-commerce strategy, and customer relationship management. He has presented papers at major conferences, and his research appears in theJournal of the Academy of Marketing Science and American Marketing Association—Marketing Educator’s Conference Proceedings. His industry experience includes sales management and quantitative market research. Jean L. Johnson (Johnsonjl@wsu.edu) is a professor of marketing at Washington State University. Her research includes partnering capabilities development in, and management of, interfirm relationships and management of international strategic alliances. Her research appears in journals such as theJournal of Marketing, the Journal of International Business Studies, theJournal of the Academy of Marketing Science, and theInternational Journal of Research in Marketing. She serves on the editorial boards of theJournal of Marketing, theJournal of the Academy of Marketing Science, the Journal of Retailing, theJournal of Business and Industrial Marketing, and reviews for others. She spent several years in the advertising industry and has lived, taught, and conducted research in France and Japan. She has been selected to cochair the 2006 winter American Marketing Association (AMA) conference.     

Creating a firm-level dynamic capability through capitalizing on market orientation and innovativeness

Drawing on the resource-based view of the firm, this study addresses the dynamic capability-generating capacity of market orientation on firm performance. Whereas prior literature has examined environmental turbulence as a contextual condition shaping the market orientation-firm performance relationship, this study takes an internal approach by focusing on existing stocks of resources within the firm while controlling for environmental conditions. A conceptual model is developed that explains how market orientation can be transformed into dynamic capability when complemented by transformational (reconfig-urational) constructs, such as innovativeness. The empirical results support the authors— theory that the effect of market orientation on firm performance is strengthened when market orientation is bundled together with internal complementary resources, such as innovativeness. The authors discuss the findings in the context of varying stages of the product life cycle and at different levels of market development. Bulent Menguc (menguc@brocku.ca), Ph.D., Marmara University, is currently an associate professor of marketing at Brock University, St. Catharines, Canada. His areas of research interest include sales force management and internal marketing, strategic orientations, and cross-cultural research methodology. His research has appeared in theJournal of the Academy of Marketing Science, theJournal of Retailing, theInternational Journal of Research in Marketing, theJournal of Business Research, theJournal of Personal Selling and Sales Management, Industrial Marketing Management, theJournal of Business Ethics, and theEuropean Journal of Marketing, among others. Seigyoung Auh (sauh@yonsei.ac.kr), Ph.D., University of Michigan, is an assistant professor at Yonsei University, South Korea. His research interests are the application of the resource-based view to marketing strategy, the role of top management teams on marketing strategy, and innovation and organizational learning. He has publications in theJournal of the Academy of Marketing Science, theInternational Journal of Research in Marketing, theJournal of Business Research, Industrial Marketing Management, and theJournal of Economic Psychology, among others.     

Achieving relationship marketing effectiveness in business-to-business exchanges

Relationship marketing research and practice operate according to the paradigm that firms should invest in relationship marketing to build better relationships, which will generate improved financial performance. However, findings that relationship marketing efforts vary in their effectiveness across customers and may even be detrimental to performance challenge this belief. This article, therefore, offers a theoretical model that addresses three key issues: 1) what factors determine a customer’s need for relational governance (relationship orientation); 2) what mediating mechanism captures the negative effects of relationship marketing on performance (exchange inefficiency); and 3) how does a customer’s relationship orientation determine the effectiveness of relationship marketing, thus allowing for effective segmentation. The authors demonstrate in an empirical study that the trust in the salesperson and exchange inefficiency both mediate the effect of relationship marketing on seller financial outcomes. In addition, customers’ relationship orientation moderates the impact of relationship marketing on both trust and exchange inefficiency.     

The role of lean launch execution and launch timing on new product performance

There is a substantial literature on the product development process but comparatively little on the impact of lean launch execution and launch timing on new product performance. Given the costs and risks involved in product commercialization, this research gap is surprising. Delays in product launch can lead to poor channel cooperation and coordination, missed market opportunities, and lost competitive opportunities, yet timing of the launch has not been included in many reported studies. In addition, managers at many firms have prioritized supply chain activities such as integration of logistics with other functional areas in order to obtain cost efficiencies and accelerate time to market; the role of lean launch execution in improving new product performance has also received little research attention. In this study, we build a conceptual model in which lean launch, launch timing, and quality of marketing effort are modeled as precursors to new product performance; we assess the role of market orientation and cross-functional integration in lean launch execution as well as indirect and direct effects of launch timing on performance. We empirically test our model with a sample of 183 U.S.-based corporate managers actively involved in new product launch. We find evidence that execution of a lean launch and effective marketing significantly improve new product performance, and that correct launch timing positively moderates the effect of lean launch on performance. These variables therefore should be carefully considered by managers of new product processes.     

Improving customer-focused marketing capabilities and firm financial performance via marketing exploration and exploitation

Evidence within the marketing literature has shown that marketing capabilities are important drivers of firm performance. However, very little is known about how firms improve their marketing capabilities via the embedding of new market knowledge. Organizational learning theory provides us with a theoretical lens through which we can examine how existing customer-focused marketing capabilities may be improved and new customer-focused marketing capabilities may be created via marketing exploitation and exploration capabilities. In addition, this study investigates whether ambidexterity in marketing exploration and exploitation exists and finds that firms cannot do both at high levels without risking a negative impact on customer-focused marketing capabilities. This study also presents findings demonstrating how improving the two customer-focused marketing capabilities in our study, brand management and customer relationship management, impacts objective financial performance.     

Creating market anticipation: An exploratory examination of the effect of preannouncement behavior on a new product’s launch

Preannouncements are strategic marketing communications directed at market participants including investors, suppliers, distributors, and buyers. Most empirical literature focuses on antecedents influencing a firm’s preannouncement behavior and on outcomes related to deleterious responses by competitors. This study differs and follows the large body of extant research that examines preannouncing behavior as a deliberate marketing communication process aimed at influencing market participants in the firm’s favor. The authors develop and test a model of preannouncement behavior that affects the success of a new product launch through market anticipation, competitive equity, and new product development resources. The findings indicate that preannouncement behavior engenders new product success through its positive effect on market anticipation—a favorable industry-wide bias in advance of new product introduction—and emphasizes the use of preannouncements as business-to-business marketing communications aimed at influencing current and prospective supply chain partners in the firm’s favor. Kim Schatzel (schatzel@umd.umich.edu) (PhD, Michigan State University) is an assistant professor of marketing at the University of Michigan, Dearborn. Her business experience includes more than 20 years of corporate and new venture work including tenure as the founder and CEO of a multinational $250 million automotive components firm and three start-up technology-based companies. She is interested in the study of new product development, business-to-business marketing communications, and firm reputation issues. She has published articles in theJournal of Marketing, theJournal of Business Research, and theJournal of Product Innovation Management. She is also highly committed to teaching excellence and has won several awards for undergraduate, graduate, and executive teaching. Roger Calantone (rogercal@msu.edu) holds the Eli Broad University Chair in Business at Michigan State University and is also the director of the Broad Information Technology Management Program (ITMP). He is interested in the study of new product innovation and technology decisions in industrial firms. Currently, his research is focused on new product decisions, industrial market segmentation, global logistics, and the use of neural network and autonomous learning models to valuate product components. He is the author of more than 200 refereed academic articles and proceedings and is coauthor of several books. His publications have appeared in journals such as theJournal of Marketing, the Journal of Marketing Research, Marketing Science, Management Science, Decision Sciences, and theStrategic Management Journal.     

Strategy clusters in japanese markets: Firm performance implications

This study identifies generic Japanese strategy clusters and explores their performance implications. It is based on Japanese executives’ perceptions of the veracity of various PIMS strategy principles in Japan. Three distinct strategy clusters are identified around market position and product strategy dimensions. These Japanese strategy clusters, when moderated by such contingency factors as strategic orientation and product life cycle stage, offer unique performance implications for the Japanese market. His research interests center on global sourcing, competitive strategy, and cross-cultural comparative issues. His recent publications includeGlobal Sourcing Strategy: R&D, Manufacturing, and Marketing Interfaces (Quorum Books, 1992) andThe Japanese Distribution System: Opportunities and Obstacles, Structure and Practices (Probus Publishing, 1993). His research interests include strategy, international marketing, marketing management, and research methodology. His research has appeared in theJournal of Marketing, Journal of Marketing Research, andIndustrial Marketing Management, among others.     

The quality and effectiveness of marketing strategy: Effects of functional and dysfunctional conflict in intraorganizational relationships

By examining only dysfunctional conflict and ignoring functional conflict, empirical research in marketing has presented only part of the story. This research offers the first systematic look at the antecedents and consequences of both functionaland dysfunctional conflict in intraorganiational relationships. The authors develop and empirically test a causal model for key organizational antecedents of new product strategy quality and market performance. They find that dysfunctional conflict in the decision-making process has deleterious consequences for quality of strategy and market performance, whereas functional conflict improves both quality of strategy and performance. Specifically, organizational design characteristics such as formalization, interdepartmental interconnectedness, low communication barriers, and team spirit improve new product performance by enhancing functional conflict, whereas centralization and high communication barriers lower new product performance by increasing dysfunctional conflict. A post hoc test for common method bias or variance suggests that bias or variance alone cannot explain these findings. His general research interests focus on strategic issues relating to internal relationships, market learning, and organizational context of marketing strategy. His research has been published in theJournal of Marketing, Journal of Business Research, Journal of Advertising Research, Journal of Advertising, andJournal of Services Marketing, among others. His general research interests focus on strategic issues relating to relationship marketing, firm performance, sustainable competitive advantage, timing of market entry, and information technology. His past research has been published in theJournal of Marketing, Journal of Business Research, Journal of Services Marketing, andMarketing Education Review, among others. His research interests are in the areas of marketing research methods, structural equations modeling, cellular automata theories and methods, and Taoist methodologies for marketing strategy. His research has been published in theJournal of Marketing, Journal of Marketing Research, andJournal of the Academy of Marketing Science, among others.     

Firm-level export performance assessment: Review, evaluation, and development

Export performance is one of the most widely researched but least understood and most contentious areas of international marketing. To some extent, this problem can be ascribed to difficulties in conceptualizing, operationalizing, and measuring the export performance construct, often leading to inconsistent and conflicting results. This study reviews and evaluates more than 100 articles of pertinent empirical studies to assess and critique export performance measurements. Based on gaps identified in this evluation, guidelines for export performance measure development are advanced, suggesting, however, a contingency approach in their application. Several conclusions and implications for export strategy and future research are derived from this analysis. Constantine S. Katsikeas holds the Sir Julian Hodge Chair in Marketing and International Business at Cardiff Business School, Cardiff University. His main research interests lie in the areas of international marketing and purchasing, global strategic alliances, and competitive strategy. He has published widely in these fields and his articles have appeared inJournal of International Business Studies, Journal of International Marketing, (formerly Columbia)Journal of World Business, Journal of Business Research, Industrial Marketing Management, andManagement International Review, among others. Leonidas C. Leonidou is associate professor of marketing at the University of Cyprus. He obtained his Ph.D. in marketing from the University of Bath, and has research interests in international marketing, relationship marketing, strategic marketing, and marketing in emerging economies. He has published extensively in these fields and his articles have appeared in various journals includingJournal of International Business Studies, Journal of Business Research, Journal of International Marketing, andManagement International Review. Neil A. Morgan is assistant professor of marketing in the Kenan-Flagler Business School at the University of North Carolina, Chapel Hill. His research interests focus on strategic issues concerning marketing resources and capabilities, and marketing planning and implementation processes and their links with business performance. His work has appeared inJournal of the Academy of Marketing Science, Journal of Business Research, Industrial Marketing Management, British Journal of Management, European Journal of Marketing, and other journals.     

The impact of product market strategy-organizational culture fit on business performance

Drawing on the organization theory literature concerning configuration theory, competing values theory, and fit assessment methodologies, we examine the existence and performance impact of product market strategy–organization culture fit. Specifically, we assess the relationship among three important elements of a firm’s product market strategy and the four cultural orientations that comprise the competing values theory of organizational culture using primary and secondary data from the US trucking industry. Using two different conceptualizations and operationalizations of fit, our results provide the first empirical support for the existence of interrelationships among product market strategy decisions and organizational culture orientations consistent with configuration theory conceptualizations of product market strategy–organizational culture fit. We also find support for theorized but previously untested relationships between product market strategy–organizational culture fit and firms’ customer satisfaction and cash-flow return on assets (CFROA) performance. Since product market strategy is heavily reliant on the input of marketers, and organizational culture has long been recognized as having an important impact on marketing-related decision making, these findings have important implications for marketing strategy research and practice.     

The moderating role of institutional networking in the customer orientation–trust/commitment–performance causal chain in China

This study uncovers the ignored role of institutional environment for marketing strategy and customer relationship management. Hypothesis tests in a sample of Chinese firms find support that channel networking strengthens the customer orientation–customer trust/commitment–firm performance (CTP) causal chain. In addition, the results show that government networking moderates this chain in a non-linear fashion. The CTP linkages are most salient when the firm develops a moderate level, rather than a high or low level of networking ties with government agencies.

Market-oriented sustainability: a conceptual framework and propositions

Utilizing Resource-Advantage Theory as the underlying theoretical foundation and drawing on literature from a variety of disciplines, we develop a market-oriented sustainability framework. By incorporating sustainability into market orientation, the goal of strategic alignment of sustainability with marketing strategies is achieved to create a competitive advantage. Three constructs identified in the model are DNA, stakeholder involvement, and performance management. These three constructs are the drivers of sustainability. DNA is used as an extended metaphor to clarify and illustrate the workings of an organization and how sustainability may be implemented. This construct includes core ideology, dynamic capabilities, and societal engagement. The firm’s DNA is communicated to both internal and external stakeholders, and stakeholders’ concerns should be an influence on strategic marketing planning. Performance management is the third major construct in the model and includes corporate social performance and corporate financial performance metrics. Within the model explication, we offer propositions to support market-oriented sustainability research and provide directions for sustainability theory, research, and practice.     

Who should be in power to encourage product program innovativeness,R&D or marketing?

The degree to which the research and development (R&D) department is regarded as more important for product innovativeness than is marketing, with greater potential to influence innovation decisions, appears ambiguous. This study examines how R&D’s level of power, relative to marketing’s, affects product program newness and meaningfulness, and thus market and financial performance. Relying on the motive of enhancement, this study reveals two underlying mechanisms to explain considerations of R&D and marketing depending on R&D’s power. A multi-informant sample of top executives and subordinates from 229 firms indicates distinct effects of R&D’s relative power on product program newness and meaningfulness. Specifically, R&D power exhibits a positive linear relationship with product program newness but a nonlinear effect with meaningfulness. To expand market and financial performance, firms should seek to generate meaningful product innovations through a moderate level of relative R&D power, particularly when their environments are characterized by high competitive intensity.     

When do the stock market returns to new product preannouncements predict product performance? Empirical evidence from the U.S. automotive industry

Substantial research has examined how stock market reactions to marketing actions affect subsequent marketing decisions. However, prior research provides limited insights into whether abnormal stock returns to a marketing action actually predict the future performance resulting from that action. This study focuses on new product preannouncements (NPPAs) and investigates the relationship between short-term stock market returns to an NPPA and the post-launch new product performance under various industry and firm conditions. Findings based on a dynamic panel data analysis of 208 NPPAs in the U.S. automotive industry between 2001 and 2014 reveal that stock returns associated with an NPPA are not an appropriate forward-looking measure of future product performance. However, under specific conditions (i.e., when the preannouncement is specific, the preannounced new product has low innovativeness, the preannouncing firm has a high reputation and invests heavily in advertising, and the preannouncement environment is less competitive), abnormal stock returns to NPPAs actually predict the future performance of new products. Thus, this study extends the marketing–finance and innovation literature with its focus on the conditions that affect the predictive power of immediate stock returns for the future performance of new products.