Organizing and integrating marketing and purchasing in business markets: An introduction to the special issue, issues and implications

The article is the introductory paper to the special issue on “Organizing and Integrating Marketing and Purchasing in Business markets”. It analyses the different organizational issues in the marketing and purchasing interfaces by an extensive analysis of the literature. It introduces the different contributions to the special issue and draw some reflections on further research steps.     

IMP thinking and IMM: Co-creating value for business marketing

We have extensive knowledge about the thematic development of the business-to-business marketing research. Much less is known, however, how major research contributions are created and disseminated, in brief, how the academic value is constructed between human and institutional actors. We address this issue by examining the relationship between IMM (Industrial Marketing Management journal) and the IMP (Industrial Marketing and Purchasing) research community in the creation of B2B marketing theory from the early 1990s to present. We argue that the relationship between the IMP community and IMM, led by Peter LaPlaca over the past 23 years, offers an exceptional living laboratory for studying academic value creation in the B2B domain. Based on documents and citation data from the late 1980s to 2016 we will show how the parties created new academic knowledge and value for each other through intensive interaction and collaborative activities. In conclusion, we discuss the forms of coordination between IMM and IMP and provide an outlook for the future of this unique relationship.     

Processes and integration in the interaction of purchasing and marketing: Considering synergy and symbiosis

Effective integration of both purchasing and marketing functions is central to effective value creation and alignment of an organization with its business environment. Rapidly changing environments create gaps in the value creation process that compromises the delivery of value to the customer and risk misalignment of value propositions to their needs. Despite the clear imperative for research in this area, the extant literature is partial and delivers limited coherence. Ours is a theoretical article that—in drawing on previous literature—introduces the new work collected in this special issue and considers this against our own empirical evidence. We present a framework that maps out the landscape of internal organizational integration with a particular emphasis on purchasing and marketing integration. Implications for theory and managers are explored.     

Transitioning and co-evolving to upgrade value offerings: A competence-based marketing view

This article shows how subcontractors in the steel and metalworking industry can effectively upgrade their customer value offerings. The study intends to identify internal and external drivers for successful transitions. It builds on the IMP's (Industrial Marketing and Purchasing Group) research tradition by looking into value creation and competence-based marketing within business networks. Using qualitative methods, the research identifies ‘ideal’ value-added market positions and relates these to specific competence configurations. It also reveals the need to manage co-evolution with other network partners in order to make a successful transition from basic to value-added offerings. The paper contributes to business marketing science by looking explicitly into the mechanisms of internal alignment when upgrading value offerings (a pre-condition often overlooked in extant literature) and by extending the concept of co-evolution.     

Mergers and acquisitions by Chinese firms: A review and comparison with other mergers and acquisitions research in the leading journals

In recent years, an increasing number of Chinese firms have been engaged in acquisitions both inside and outside of China. Nevertheless, our understanding of Chinese merger and acquisition (M&A) activity is limited because a majority of M&As in the past 100 years have been performed by firms from developed countries and it is those M&As that have been the focus of prior research. Thus this paper aims to address the following research questions: What are the new insights gained from Chinese M&A research? What are the emerging future directions of Chinese M&A research? To address those questions, this article provides a thorough literature review of the most recent M&A research in top journals and studies of M&As both inside and outside of China. Consequently, we identify both new insights from Chinese M&A research and the research gaps that Chinese M&A research needs to fulfill compared with general M&A research in top journals. We further highlight the important and unique characteristics of Chinese M&As and call for future research.     

A service perspective on business relationships: The value creation, interaction and marketing interface

Adopting a service perspective or logic on business directs suppliers' focus in business relationships towards engaging with their customers' business processes. The purpose of this article is to analyze implications for value creation and marketing of adopting a service logic in business relationships. In the article it is demonstrated that a service perspective is multi-dimensional, enabling the mutual creation of value, with service as a mediating factor in that process. It is argued that value creation, purchasing, usage and marketing are intertwined processes. Here supplier-customer interactions are in a focal position. This perspective enables marketers to better understand how to develop and extend service offerings through assistance to customers' processes relevant to their businesses. Therefore, the underpinning logic of industrial interactions is analyzed in detail, extending marketing's conventional boundaries.     

Joint marketing and sales appointment: Uncertainty from intertwining of marketing and sales in one position

The integration of diverging thought worlds of marketing and sales can have many synergistic benefits for industrial firms. However, intertwining marketing and sales in one position introduces coordination costs—costs that have, for the most part, been ignored by the existing B2B literature. The authors argue that appointment announcements of new executives to joint marketing and sales positions (M&S) puts these costs in stark relief, especially relative to new marketing-only (M) or sales-only (S) appointments' announcements. Leveraging event-study methodology and latent instruments, this research examines secondary data on over 800 executive appointment announcements, 436 of which are related to marketing and sales. The authors find that new appointments to joint M&S positions introduce hard to simultaneously balance change across diverging thought worlds that results in uncertainty and hurt firm value. Drawing on structural-contingency framework, this study finds that less formalization of tasks, represented by insider status of an appointee, can mitigate this disruption, by stabilizing structures during change. Furthermore, specialization in B2B marketing technology weakens the negative effect of announcements of joint M&S appointments, because such positions lean heavily towards sales and thus require less coordination between the two functions. However, specialization with respect to industry environment, represented by market concentration, exacerbates the disruptive effect of appointing new executives to joint M&S positions.     

Co-management of purchasing and marketing: Why,when and how?

This article discusses the theoretical and conceptual foundations for the co-management of purchasing and marketing and thereby provides some answers to the questions, why, when and how purchasing and marketing should be co-managed. It develops a conceptual framework distinguishing between internal and external co-management of purchasing and marketing. Improving value creation and value capture is identified as a necessary “pull factor” driving the co-management of purchasing and marketing. Based on resource dependence theory (RDT), we argue that dependence on critical resources is another important “push factor” for the emergence of external co-management. We present a RDT-based typology of co-management constellations showing that co-management is not a one-size-fits-all approach and summarize our findings in five propositions on the co-management of purchasing and marketing. In sum, we conceptualize co-management of marketing and purchasing as a bridging strategy that allows a focal firm to accommodate dependence on critical upstream and/or downstream resources and improves value creation within the supply chain.     

Understanding the role of marketing-purchasing collaboration in industrial markets: The case of Russia

This study aims to investigate the role of interfunctional collaboration between marketing and purchasing functions in industrial companies. Interfunctional collaboration is considered as a measure of the internal alignment and partnership between departments in the firm, which in turn contributes to the creation of sustainable advantages via improved external partnerships and facilitating demand chain integration. We test the impact of customer orientation as well as the interactions between departments (specifically marketing and purchasing) as collaboration antecedents, and analyze the direct impact of marketing-purchasing collaboration on business performance. The model is tested on a sample of 148 industrial companies in Russia with two key respondents in each firm, incorporating the purchasing as well as the marketing perspective. The results show that marketing-purchasing collaboration mediates the effects of interfunctional interaction as well as customer orientation on business performance. Alternative model testing shows that the direct effects of these antecedent constructs on performance are non-significant in the context of Russian industrial companies.     

Do telecom carrier takeovers create value? Longitudinal analysis of U.S. telecom carrier takeovers from 1996 to 2005

Takeovers by telecommunications carriers have surged during between 1996 and 2005, stimulated by the Telecommunications Act of 1996. In this study, we hypothesize and test the short-term and long-term performance of telecommunications carrier mergers and acquisitions (M&As) between 1996 and 2005 according to three main categories (strategic types, bidder characteristics, and payment methods). For short-term performance, this study investigates abnormal market returns of bidding firms after M&A announcements and our study shows that telecommunications carrier M&A announcements do result in a significant increase in shareholder wealth in the short run. However, from a long-term perspective, which has been investigated in terms of the survival rate and the operating performance after M&As, the telcos experience a statistically significant decrease of up to 10%. The results also show that though strategic type, bidder characteristics, and payment method play an important role in the value creation of M&As in the short term, only the bidder size matters in the success of M&As over a long period of time.     

Impact of purchasing trends on industrial marketers

Purchasing departments have undergone dramatic changes during the past decade. This article examines key characteristics that changed during the 1970s including the purchasers' view of effective salespersons and women in purchasing. It is important that industrial marketers better understand these changes and subsequently implement marketing efforts that compliment the purchasing environment of the 1980s.     

Dispersion of influence between Marketing and Sales: Its effects on superior customer value and market performance

In this study the authors investigate how dispersion of influence between Marketing and Sales (DIMS) affects the creation of superior customer value and the firm's market performance. Hypotheses are tested on a sample of 326 strategic business units using structural equation modelling analysis. Three main results emerge which contribute to the understanding of the consequences of DIMS within companies. First, DIMS increases interaction and collaboration between Marketing and Sales, without blurring their respective goals, roles and responsibilities. Second, DIMS contributes to the diffusion of a customer oriented-culture across the organization. Third, the findings of this study clarify how and why DIMS affects organizational performance by showing simultaneously that superior customer value mediates the effects of DIMS on market performance, and that Marketing–Sales interface and customer-oriented culture mediate the effects of DIMS on superior customer value. The authors discuss the study's theoretical contributions and offer directions for future research. Overall, this study provides a new and broader perspective to managers responsible for the allocation of decision making influence between Marketing and Sales over a range of market-related issues.     

How purchasing agents handle personal risk

Purchasing agents are confronted with a myriad of stresses in their work. One of the most important stress factors faced is the perceived risk associated with making buying decisions. This article examines the concept of perceived risk from an organizational procurement perspective and presents the results of a study on percieved personal risk, experienced by industrial purchasing executives. The business implications of these findings are then discussed.     

Demand chain alignment competence — delivering value through product life cycle management

This paper endorses demand chain alignment as a competence that supports effective product life cycle (PLC) management. Demand chain alignment integrates the demand creation (historic domain of marketing) and demand fulfilment processes (domain of supply chain management), to develop and to deliver products that convey superior customer value while deploying resources efficiently. So far, the relationship between demand chain alignment and PLC management has only been addressed from an operations and demand/supply chain perspective, but not from a marketing perspective. Three research propositions, on the relationship between both concepts, are derived from a literature review and applied to a case study from a global player in the tobacco industry. The findings do not support the current view that the product life cycle is a market-oriented classification variable for demand chain strategies. Instead, demand chain alignment needs to link customer needs-based segments with the supply chain. Moreover, PLC management and demand chain alignment have a mutually reinforcing relationship, in which PLC management can facilitate the competence development, ensures a dynamic perspective and, at the same time, benefits from aligned demand creation and fulfilment processes. Based on the findings, a model integrating demand chain alignment and PLC management is proposed.     

Why integrating purchasing with marketing is both inevitable and beneficial

The shift away from manufacturing in Western developed economies has resulted in economies in which service industries are dominant. Marketing itself has undergone a paradigmatic shift from a focus on the exchange of goods to the provision of capabilities. This paper examines the relationship between marketing and purchasing as a result of the shift from product- to capability-focused commerce. We suggest that the marketing and purchasing departments will become closer due to two major reasons. First, as marketers increasingly become solution-oriented rather than product-focused, they will need to source products and services from third-party vendors and will require deeper involvement of the purchasing department. Second, with the emergence of customer-centric marketing coupled with build-to-order manufacturing, marketing and purchasing will have to be better aligned to deliver solutions to customers. These new dimensions in the marketing–purchasing interaction will also lead to changes in the selection, training, and recruitment of marketers and purchasers as well as their roles in the supply chain. We elaborate on these changes likely to occur in business-to-business organizations and along with implications for managers.     

Value in business markets: What do we know? Where are we going?

This article presents a review of the existing literature on value in business markets, from the perspective of both business marketing and purchasing and supply management, in three steps. First, some of the early research strands on value are examined including value analysis and engineering, the augmented product concept, consumer values, and economic value of customers. Then this seminal research and more recent research are categorized according to two distinct levels of analysis: the value of goods and services versus the value of buyer-supplier relationships, and different understandings of the role of business marketing and purchasing and supply are discussed. Lastly, a number of future research avenues, which can be organized around the value of products/relationships on the one hand and value analysis/creation/delivery on the other, are considered.     

The impact of value congruence on marketing channel relationship

Organizational values guide acceptable behavior and provide motivational dynamism. Marketing channel literature has yet to address the impact of values on interfirm exchanges. We propose that value congruence between cooperating firms can be an effective governance method. This research examines the impact of value congruence between manufacturers and their primary distributors. Survey data from 278 manufacturing firms demonstrate that perceived value congruence has a positive effect on distributors' performance. Moreover, information sharing and joint problem solving serve as mechanisms that partially mediate the main effect. This research calls for integration of organizational values into partner selection and marketing channel governance.     

Strategic relationships between boundary-spanning functions: Aligning customer relationship management with supplier relationship management

This review focuses on the potential impact of enhanced strategic relationships between the boundary-spanning functions in supplier organizations. Specifically, the concern is with alignment between the organizational groups managing: marketing, sales and strategic account management; purchasing and supply strategy; and, collaborations and external partnerships. The topic is framed by the organizational evolution being driven by market change, and the search for superior innovation capabilities and business agility. These changes bring new challenges in cross-boundary integration and managing complex market networks. The logic is that strategic external relationships (with customers, supplier and partners) should be mirrored in strategic internal relationships (between the functions with lead responsibilities for managing relationships with customers, supplier and partners). Approaches to enhancing this capability include process management, internal partnering strategies and internal marketing activities. The discussion identifies a number of implications for practice and new research directions.     

Exploiting innovative opportunities in global purchasing: An assessment of ethical climate and relationship performance

Purchasing managers are expected to balance costs, innovation, supplier management, and corporate social responsibility while coordinating expanding areas of the corporation. The increased responsibilities and pressures to innovate brings purchasing managers into potentially increasingly difficult ethical dilemmas. In this study, we examine the relationships between organizational culture, learning, entrepreneurial innovation, and purchasing outcomes in different ethical climates. To address external business conditions that may influence innovation in purchasing, we also examine the moderating effects of technological and market turbulence. Data from 200 purchasing managers in multinational corporations were used to test the relationships through structural equation modeling. We find that entrepreneurial innovation positively affects the quality of the relationships among sourcing participants when operating in a climate valuing ethics. The study results are particularly relevant for managers concerned that establishing an ethical climate may restrict innovation in the purchasing process.     

Creating value through mutual commitment to business network relationships

A structural model of business relationship development in a business network context is formulated and tested on data from the European International Marketing and Purchasing (IMP) project. The empirical analysis demonstrates a causal chain from business network connection through mutual commitment and mutual dependence to value creation in the relationship. The results show that mutuality in business network relationships is critical in developing interfirm systems of workflow interdependence that promote the creation of value. This also implies that, through their interaction in business network relationships, firms in business markets organize and share an unbounded structure of interdependent activities, enabling them to achieve greater value than would be the case if they did not engage in relationship development. Copyright © 1999 John Wiley & Sons, Ltd.