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.     

How does product program innovativeness affect customer satisfaction? A comparison of goods and services

This article attempts to provide deeper insights into the link between the innovativeness of a company’s offered goods/services and customer satisfaction. This study proposes an inverted U-shaped relationship between the innovativeness of the offered goods and customer satisfaction. For the innovativeness of services, information economics and services marketing literature indicate an inverted S-shaped relationship. Two separate studies conducted for goods and services confirm the proposed nonmonotonic effects of the investigated relationships. Both studies use dyadic data from marketing managers to assess innovativeness and from customers to indicate customer satisfaction.     

Serving customers and consumers effectively in the twenty-first century: A conceptual framework and overview

In this article, the authors first propose and discuss a conceptual framework pertaining to the theme of this special issue. This framework portrays “markets” as consisting of “customers” and “consumers,” specifies the distinction as well as linkages between the two, and outlines specific components of individual linkages between pairs of entities within markets. Using this framework as a backdrop, the article then provides an overview of the rest of the special issue by discussing how each of the remaining articles relate to the framework and to one another. A. Parasuraman (D.B.A., Indiana University) is a professor and holder of the James W. McLamore Chair in Marketing at the University of Miami. He teaches and does research in services marketing, service-quality measurement, and the role of technology in marketing to and serving customers. He has received many distinguished teaching and research awards, including, most recently, the “Career Contributions to the Services Discipline Award” given by the American Marketing Association's (AMA) SERVSIG. He has written numerous articles in journals such as theJournal of Marketing, theJournal of Marketing Research, theJournal of Retailing, andSloan Management Review. He is the author of a marketing research text and coauthor of two books on service quality and services marketing. In addition to being the editor of theJournal of the Academy of Marketing Science (JAMS), he serves on the editorial review boards of five other journals. Dhruv Grewal (Ph.D., Virginia Tech) is Interim-Chair and a professor of marketing at the University of Miami. He has published more than 40 articles in journals such as theJournal of Marketing, theJournal of Consumer Research, theJournal of Marketing Research, theJournal of the Academy of Marketing Science, and theJournal of Retailing. His research interests focus on retailing, pricing, international marketing, and consumer behavior issues. He currently serves on the editorial review boards of theJournal of Marketing, theJournal of the Academy of Marketing Science, theJournal of Retailing, and theJournal of Public Policy & Marketing. He has won awards for both his teaching and research. He has coedited a special issue of theJournal of Public Policy & Marketing and of theJournal of Retailing. He was recently elected to the AMA Academic Council—VP Research and Conferences (1999–2001). He is currently writing a book onMarketing Research (publisher: Houghton Mifflin).     

Some strategy implications of a matrix approach to the classification of marketing goods and services

The traditional schemes for the classfication of goods and services do not adequately incorporate the marketing characteristics of services. However, rather than pose a separate classification scheme for services, the author proposes a broadened classification approach to include both goods and services. Some marketing strategy implications of this classification approach are discussed.     

Perceived marketing–sales relationship effectiveness: a matter of justice

There is a compelling need to improve the relationship between managers in marketing and sales departments. This paper argues that one critical way of enhancing individual managers’ perceptions of relationship effectiveness between these departments is to view the issue as a matter of justice and suggests that perceived marketing–sales relationship effectiveness is positively influenced by managers’ perceptions of organizational justice. Furthermore, it proposes that interfunctional communication has the potential to enhance the proposed positive effects of justice and hence needs to be considered and effectively managed when looking at marketing–sales relationship effectiveness. Data drawn from a survey of 203 marketing and sales managers in 38 consumer packaged goods companies are used to empirically test these predictions. The authors find that perceived sales–marketing relationship effectiveness is influenced by perceptions of distributive, procedural and interactional justice. Greater interfunctional communication is found to further enhance the positive effects of distributive and procedural justice on perceived relationship effectiveness, but it does not contribute to the already strong positive effects of interactional justice. Furthermore, results reveal important differences in the effects of justice on perceived relationship effectiveness across the marketing and sales departments.     

Foreign market entry mode choice of service firms: A contingency perspective

Research on how service firms choose their initial mode of operation in foreign markets appears to have led to two contradictory conclusions. Findings from one group of studies suggest that factors determining entry mode choice by manufacturing firms are generalizable to service firms. Findings from another group of studies contradict that view. The authors reconcile the two views by means of a classification scheme that allows some services to be grouped with manufactured goods in terms of entry mode choice. A conceptual model of factors affecting the entry mode choice of service firms is proposed, research propositions are developed, and managerial implications and future research directions are discussed. Ikechi Ekeledo is a doctoral candidate in marketing at the University of Illinois at Chicago. His research interests include international marketing, services marketing, and strategic market planning. K. Sivakumar (Ph.D., Syracuse University, 1992) is an associate professor of marketing at the University of Illinois at Chicago. His research interests include pricing, international marketing, and innovation management. His research has been published or is forthcoming inBarron’s, International Marketing Review, theJournal of Business Research, theJournal of Marketing, theJournal of Marketing Theory & Practice, theJournal of Product Innovation Management, theJournal of Social Behavior & Personality, Marketing Letters, Marketing Science Institute’s Working Paper Series, and Pricing Strategy & Practice: An International Journal, and summarized as Editors’ Briefings inHarvard Business Review. He has won several awards for research and is on the editorial boards of four scholarly journals.     

Gender,income differences,and marketing: Examining the “earnings gap” in three areas of marketing

This research explores empirically a socioeconomic/equity issue that has been extensively investigated in many areas, but never marketing—the so-called “earnings gap.” Specifically, the study investigates income differences between men and women in marketing, while controlling for differences in business experience, level of education, corporate level, type of industry, and size of firm. The research focuses on three areas in marketing: (1) marketing management, (2) marketing research, and (3) advertising agency management. Findings indicate that there is an “earnings gap” for marketers. Importantly, however, the data show that a substantial portion of the gap can be explained by variables other than sex.     

Marketing implementation: The implications of marketing paradigm weakness for the strategy execution process

Reviewing the marketing strategy implementation issue in an era of a weaker marketing paradigm contrasts traditional sequential flow models of implementation with the “strategy formulation/implementation dichotomy” and leads to the emergence of a processual view of implementation. The processual view clarifies the underlying behavioral and organizational factors that build strategy implementation capabilities. These underlying factors are at risk from a weaker marketing paradigm. The weakening of the marketing paradigm is discussed in terms of the downsizing and disappearance of the marketing function, but more fundamentally in the loss of strategic influence for marketing in the face of competing management paradigms such as the “lean enterprise” and “lean thinking.” The conclusion is that the impact on implementation capabilities is being felt first in companies where the marketing paradigm has been traditionally weak, but that this may be prototypical for other companies in the longer term. A number of important areas for conceptual and empirical attention are indentified. Nigel F. Piercy, Ph.D., is Sir Julian Hodge Chair in Marketing and Strategy with Cardiff Business School, at Cardiff University in the United Kingdom, and has held visiting positions at Texas Christian University, the University of California-Berkeley, and the Athens Laboratory for Business Administration. He has published widely in the area of marketing strategy and implementation in the international literature and has had articles published in theJournal of Marketing, theJournal of the Academy of Marketing Science, theJournal of International Marketing, and theJournal of World Business. He has published eight books, most recently the executive textMarket-Led Strategic Change: Transforming the Process of Going to Market (Oxford, UK: Butterworth-Heinemann).     

Marketing information systems—The problem of system usage

Much literature has been devoted to singing the praises of present and potential computer utilization in marketing. Highly touted are “total information systems,” “on-line, real-time systems,” and “simulation-based systems.” One would be led to believe that each company has devoted or should be devoting its moneys and energies to the design and implementation of such sophisticated computer-based marketing information systems. Yet recent evidence has indicated a lack of enthusiasm-indeed, in some cases antagonism exists toward information systems in marketing. One reason for this disillusionment has been low usage of existing marketing information systems by marketing management. System utilization holds the key to a favorable return on investment in marketing information systems. This article explores many of the causes of infrequent to non-existent system usage and offers a plea and a plan for active elimination of this problem.     

Scientific status and knowledge use: Two perspectives

Summary In summary, it is important, from time to time, to step back and consider the publication process, as it exists in marketing and as it operates forJAMS. As part of this consideration, the issue of journal quality is paramount. As mentioned above, there are many ways to assess journal quality, and each method has its advantages and its limitations. In the field of marketing, we have a long history of relying on perceptual data, and this tradition is reflected in methods that rely on expert ratings and rankings of journals. In our field, we also have a history of trying to collect “objective” or quantitative data, and methods that rely on citation counts fit into this tradition. Here, using contrasting but related methods, we report encouraging evidence about the growing status and reputation ofJAMS as an influential publication outlet for marketing scholarship.     

Implementing a customer relationship strategy: The asymmetric impact of poor versus excellent execution

The benefits of developing customer relationships are well established. However, a well-intentioned relationship marketing strategy may fail because of poor implementation. In this study, the authors look at the effects of implementing a customer relationship strategy. Specifically, they examine the implementation of a personal-banker strategy as a means to developing customer relationships in the retail banking industry. The authors show that an “excellent” personal banker can increase overall customer satisfaction and loyalty compared to customers who do not have a personal banker. However, a poorly performing personal banker can result in lower overall customer satisfaction and loyalty than if no personal banker had been available. Moreover, the effects seem to be asymmetric, with the negative effects of a poor relationship strategy exceeding the positive benefits ofan “excellent” strategy. Mark R. Colgate is a senior lecturer in services marketing at the School of Business and Economics, University of Auckland, New Zealand. His research focuses on customer inertia, relationship marketing, and the interface between information technology and marketing. His research has been published in theEuropean Journal of Marketing, theInternational Journal of Service Industry Management, andThe Service Industries Journal and other services journals. Peter J. Danaher is a professor in the Department of Marketing Department at the University of Auckland, New Zealand. He has a Ph.D. in statistics from Florida State University and an M.S. in statistics from Purdue. His primary research interests are media exposure distributions, advertising effectiveness, customer satisfaction measurement, forecasting and sample surveys, resulting in many publications in journals such as theJournal of Marketing Research, theJournal of Advertising Research, theJournal of the American Statistical Association, theJournal of Retailing, theJournal of Business and Economic Statistics, and theAmerican Statistician. He has consulted extensively with Telecom, Optus Communications, Unilever, ACNielsen, and other market research companies.     

The impact of technology on the quality-value-loyalty chain: A research agenda

In this article, the authors first propose a simple model summarizing the key drivers of customer loyalty. Then, on the basis of this model and drawing on key insights from the preceding articles in this issue, they outline a set of issues for further research related to the quality-value-loyalty chain. Next, the authors develop a conceptual framework that integrates the quality-value-loyalty chain with the “pyramid model,” which emphasizes the increasing importance of technology-customer, technology-employee, and technology-company linkages in serving customers. Using this integrated framework as a spring-board, they identify a number of avenues for additional inquiry pertaining to the three types of linkages. A. Parasuraman (D.B.A, Indiana University) is a professor and holder of the James W. McLamore Chair in Marketing at the University of Miami. He teaches and does research in services marketing, service-quality measurement, and the role of technology in marketing to and serving customers. He has received many distinguished teaching and research awards, including, most recently, the “Career Contributions to the Services Discipline Award” given by the American Marketing Association's (AMA) SERVSIG. He has written numerous articles in journals such as theJournal of Marketing, theJournal of Marketing Research, theJournal of Retailing, andSloan Management Review. He is the author of a marketing research text and coauthor of two books on service quality and services marketing. In addition to being the editor of theJournal of the Academy of Marketing Science (JAMS), he serves on the editorial review boards of five other journals. Dhruv Grewal (Ph.D., Virginia Tech) is Interim-Chair and a professor of marketing at the University of Miami. He has published more than 40 articles in journals such as theJournal of Marketing, theJournal of Consumer Research, theJournal of Marketing Research, theJournal of the Academy of Marketing Science, and theJournal of Retailing. His research interests focus on retailing, pricing, international marketing, and consumer behavior issues. He currently serves on the editorial review boards of theJournal of Marketing, theJournal of the Academy of Marketing Science, theJournal of Retailing, and theJournal of Public Policy & Marketing. He has won awards for both his teaching and research. He has coedited a special issue of theJournal of Public Policy & Marketing and of theJournal of Retailing. He was recently elected to the AMA Academic Council—VP Research and Conferences (1999–2001). He is currently writing a book onMarketing Research (publisher: Houghton Mifflin).     

Frontiers of the marketing paradigm in the third millennium

The domain and theories of marketing have been expanding since the origins of the discipline. Since the 1970s marketing science has been organized around the exchange paradigm. Marketing concepts apply to all forms of exchange, whether it is goods, services, personages, places or ideas, and whether it is between individuals, for-profit and nonprofit firms, governments and NGOs. Marketing theories evolved from a firm oriented view to encompass the exchanging dyad. More recently the paradigm expanded to a network level of explanation, and relational theories have come to the fore. But even as the field struggles to grasp its new fields of explanation, there is a Kuhnian shift happening at its boundaries. The shift significantly bends the marketing worldview as well as the theoretical tools and methodologies we use to study it. In this paper we develop a three-tiered explanation of the emerging field of marketing—its subphenomena (consumer experiences and sensory systems), its phenomena (marketing networks), and its superphenomena (sustainability and development).     

The role of relationship quality in the stratification of vendors as perceived by customers

Companies implement preferred supplier programs to reduce their vendor relationships to a reasonable few. Consequently, vendors who do not effectively manage their customer-based relationships are strong candidates for deletion from a customer’s list of long-term suppliers. The emergence of preferred supplier programs suggests that businesses are beginning to formally recognize and reward differences between their qualified vendors. Vendor stratification is proposed as a framework for understanding the evolution of preferred vendor programs. With the growing interest in relationship marketing, a study was conducted to empirically examine the extent to which businesses use relationship quality perceptions to differentiate their qualified vendors. The findings support the notion that relationship quality is a higher-order construct that can be used as a basis for developing vendor stratification systems. The article concludes with a discussion of the managerial and research implications of the study findings. Michael J. Dorsch (Ph.D., University of Arkansas) is an associate professor of marketing at Clemson University. His research has been published in theJournal of the Academy of Marketing Science, theJournal of Business Research, and theJournal of Personal Selling and Sales Management, among others. His research interests include issues concerning relationship marketing and marketing research methods. Scott R. Swanson (Ph.D., University of Kentucky) is an assistant professor of marketing at East Carolina University. He previously spent 9 years as a purchasing executive and his research interets include issues related to services marketing, atmospherics, and marketing ethics. His research has been published in theJournal of Business to Business Marketing, theInternational Journal of Quality and Reliability Management, AMA Educators’ Proceedings, andRetailing: Theories and Practices for Today and Tomorrow. Scott W. Kelley (D.B.A., University of Kentucky) is an associate professor of marketing. His research has been published in theJournal of the Academy of Marketing Science, theJournal of Retailing, theJournal of Business Research, theJournal of Advertising, and theJournal of Personal Selling and Sales Management, among others. His research interests include issues concerning services marketing and marketing ethics.     

A three-component model of customer commitment to service providers

Although research into the determinants of service provider switching has grown in recent years, the focus has been predominantly on transactional, not relational, variables. In this research, the authors address the role of consumer commitment on consumers’ intentions to switch. Drawing from the organizational behavior literature, they build on previous service switching research by developing a switching model that includes a three-component conceptualization of customer commitment. Structural equation modeling is used to test the model based on data from a survey of 356 auto repair service customers. The authors’ results support the notion that customer commitment affects intentions to switch service providers and that the psychological states underlying that commitment may differ. As such, future marketing research should consider these different forms of commitment in understanding customer retention. The implications of this model for theory and practice are discussed. Havir S. Bansal (hbansal@wlu.ca) is an associate professor of marketing at Wilfrid Laurier University. He earned his Ph.D. from Queen’s University in 1997. His research interests are focused in the area of services marketing with emphasis on cuctomer switching behavior, word-of-mouth processes in services, and tourism. His research has been published in theJournal of Service Research, theJournal of Quality Management, andPsychology and Marketing and has publications forthcoming in theJournal of Services Marketing andTouris Management. He has also presented at and published articles in the proceedings of various national and international conferences. P. Gregory Irving (girving@wlu.ca) is an associate professor of organizational behavior at Wilfrid Laurier University. He received his Ph.D. in industrial/organizational psychology from the University of Western Ontario. His research interests included commitment and work-related attitudes, psychological contracts, and organizational recruitment and socialization. His research has appeared in a variety of journal including theJournal of Applied Psychology, Personnel Psychology, theJournal of Organizational Behavior, theJournal of Management, Human Performance, andBasic and Applied Social Psychology. Shirley F. Taylor (Ph.D., University of British Columbia) (staylor@business.queensu.ca) is an associate professor in the School of Business at Queen’s University, where she teaches and conducts research in the area of services marketing. Her research interests include service provider loyalty and switching, customer commitment, and perceptions management of service delays. Her work has been published in theJournal of the Academy of Marketing Science, theJournal of Marketing, Psychology & Marketing, theJournal of Service Research, theInternational Journal of Research in Marketing, and theJournal of Public Policy and Marketing. She currently serves on the editorial boards of theJournal of the Academy of Marketing Science, theJournal of Business Research, and theCanadian Journal of Administrative Sciences.     

The impact of services versus goods on consumers’ assessment of perceived risk and variability

With the development of service marketing concepts comes the need to test theory against consumer behavior. This study examines differences in perceived risk and variability between services and goods. In a controlled experiment whereby product stimuli were objectively placed along a goods-services continuum, data from consumers was collected focusing on six types of perceived risk and product variability. The findings of the study provide evidence that services evoke heightened risk and product variability perceptions.     

“Migrating” to new service providers: Toward a unifying framework of consumers’ switching behaviors

This article explores the applicability of a model of migration from the human geography literature as a unifying, theoretical framework for understanding consumers’ service provider switching behaviors. Survey data from approximately 700 consumers are used to examine the usefulness of the push, pull, and moorings (PPM) migration model. The PPM migration model performs better than an alternative model; all three categories of antecedents to switching (migration)—push, pull, and mooring variables—have significant direct, and some moderating, effects on switching intentions. Harvir S. Bansal (Ph.D., Queen’s University, hbansal@wlu.ca) is an associate professor of marketing at Wilfrid Laurier University. His research interests are focused in the area of services marketing with emphasis on customer switching behavior, word-of-mouth processes in services, structural equation modeling, and tourism. His research has been published in theJournal of the Academy of Marketing Science, the Journal of Services Marketing, the Journal of Service Research, Tourism Management, theJournal of Quality Management, andPsychology and Marketing. He has also presented at and published articles in the proceedings of various national and international conferences. Shirley F. Taylor (Ph.D., University of British Columbia, staylor@business.queensu.ca) is an associate professor in the School of Business at Queen’s University, where she teaches and conducts research in the area of services marketing. Her research interests include service provider loyalty and switching, customer commitment, and perceptions management of service delays. Her work has been published in theJournal of the Academy of Marketing Science, the Journal of Marketing, Psychology & Marketing, theJournal of Service Research, theInternational Journal of Research in Marketing, and theJournal of Public Policy and Marketing. She currently serves on the editorial boards of theJournal of the Academy of Marketing Science, theJournal of Business Research and the Canadian Journal of Administrative Sciences. Yannik St. James (ystjames@business.queensu.ca) is a doctoral candidate in the School of Business at Queen’s University, where she conducts research at the intersection of consumer behavior and marketing strategy. Her research interests include the role of affect in consumer behavior, brand management, and services marketing. She has presented her work at the Association for Consumer Research Conference, the Academy of Marketing Science Conference, and the Frontiers in Services Conference.