The impact of internal,external, and competitor factors on marketing strategy performance

ABSTRACT

Strategy formulation is commonly understood as the match between a firm’s internal resources and skills and its external environment. Marketing strategy performance is the function of a dynamic, interactive process incorporating internal firm resources, external environmental factors, and competitive actions. The study aims to assess the impact of competitor actions on marketing strategy performance. We develop a model that accommodates the effects of 29 variables (comprising internal marketing strategy variables, external environmental factors and competitors’ marketing mix variables) on business performance. We empirically test the model using simultaneous equation modelling of time-series data on UK car manufacturers collected from publically available resources and annual reports. The results show that external factors, in particular competitors’ marketing mix elements, have a greater influence on a company’s business performance than internal (marketing and non-marketing) strategy variables. Implications for marketing theory and management are discussed.     

How to Monitor Competitive Advertising

Marketing managers are becoming increasingly aware of the benefits from structured and continuous monitoring of competitor advertising activity. To know quickly and accurately how much competitors are spending on their media advertising and how they are utilizing their budgets can be of profound help to marketing management, advertising agency planners and creative teams. Systematic monitoring can signal moves made by competitors—introducing new products or product modifications, special offers, new strategies and approaches to markets not previously covered. Of interest to the analyst are innovations in competitor strategies.     

The role of buyer and supplier relationships in integrating TQM through the supply chain

Many academics and practitioners have alluded to the importance of total quality management (TQM) principles and the important role the purchasing function plays in the quality process. However, the role of the buyer–supplier relationship in the TQM process has not been directly investigated to any large extent. Three hypotheses concerning the role of buyer–supplier relationships in the success of TQM implementation were tested. The results demonstrate that buyer–supplier relationships are different in firms with successful TQM programs. Hypothesis 1 suggests that those firms with successful TQM programs will have more formal mechanisms for interacting with suppliers. The second hypothesis suggests that business units with more successful TQM programs exhibit a greater degree of competitive focus and single sourcing. The third hypothesis relates to a higher level understanding of internal and external customer needs by successful TQM adopters. All hypotheses were supported. The buyer–supplier relationships in firms with successful TQM programs are different than firms with less successful TQM programs.     

Buyer/supplier partnering in British industry: The automotive and telecommunications sectors

Practitioners and academics in the fields of marketing and purchasing management share an interest in the effective management of inter‐firm buyer‐seller relationships. Buyer/supplier partnering has been advocated as an effective approach to the management of key customer or supplier relationships. Within both the automotive and telecommunications sectors of the British economy there is intense interest among major buying organisations in the development of durable partnerships with key suppliers. However, within both industries the major UK and American owned firms have to operate under the shadow of traditionally antagonistic relations with suppliers. The current state of buyer/supplier partnering within the two industries is evaluated within this historical context, and the key problem identified is the need to overcome antagonism within the inter‐organisational culture. The costs and benefits of partnering approaches to both marketing and purchasing are discussed, and implications for marketing managers seeking to develop partnerships with major customer organisations are outlined.     

Competitor identification,perceived environmental uncertainty,and firm performance

To create a competitive advantage and generate superior performance, firms must first identify rivals. However, there is little understanding of how perceived environmental uncertainty affects competitor identification, why some firms are better at identifying domestic versus foreign rivals, or how competitor identification is related to firm performance. In this paper we theorize that perceived environmental uncertainty is an important antecedent of competitor identification; it influences how many competitors a firm identifies. Our theory also suggests that different firm characteristics influence domestic/foreign competitor identification and that there is an inverted‐U shaped relationship between under/overidentification of competitors and firm performance. Based on a large sample of Taiwanese firms, we find support for each of these ideas. Our study helps reinforce the importance of competitor identification for firm success. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

“Switching is easy”—Service firm communications to encourage customer switching

For several service industries, customer acquisition is challenged because of matured markets. Winning new customers typically means encouraging the competitors׳ customers to switch. This article analyzes “Switching is easy”-messages of retail banks. In their marketing communication, UK banks focus on several aspects to decrease perceived switching costs of their competitor customers. However, many facets stay unmentioned such as stress-related dimensions of switching a relationship. The study therefore contributes to service research by outlining how service firms focus on to decrease perceived switching costs of bank customers to acquire them from competitors.     

Memory Effects of Different Relational Links between Brands and Sponsored Events

Sport sponsorship is an important marketing communication tool, and stakes in sponsorship deals are high. Therefore, sponsors strive to ensure that their investments are effective and protected from competitors—that is, ambusher marketers’ attacks. Still, little is known about how ambush marketing affects sponsor identification and misidentification of ambushers as sponsors. This study investigates levels of sponsor and ambusher identification in three experimental settings, controlling for the presence/absence of an ambusher, communication modality, and response formats. A field study in the context of a large sports event demonstrates the external validity of the findings. The results provide evidence of a nondestructive interference of ambush marketing, indicating that ambush marketing does not necessarily harm sponsor identification. Misidentification of nonsponsors as sponsors occurs because of the indirect link established between the event and the company through ambush marketing, but not as a consequence of other communication activities by a competitor with no link to the event. Finally, a combined sponsor–ambusher perspective indicates that sponsors do not necessarily have a consistent “official sponsor” advantage over ambushers. Findings are discussed with emphasis on implications for sponsors, ambushers, and marketing researchers.     

An Empirical Study of Buyer–Supplier Relationships within Small Business Organizations

A paradox exists in small business organizations; although effective buyer–supplier relationships are essential to the success of small businesses, these organizations may not have the purchasing and selling power in terms of managerial resources to implement them. This provides us an opportunity for research to determine how well developed are buyer–supplier relationships within small business organizations. Grounded in transaction cost and resource dependence theory, this paper presents and empirically tests a model that examines the relationships between buyer and supplier specificity and long‐term buyer–supplier relationships and the latter's impact on organizational performance from the buyers' perspective. The results of this study provide insight into the development and impact of buyer–supplier relationships within small business organizations. Several managerial implications can be determined.     

Stealth marketing as a strategy

Stealth marketing has gained increasing attention as a strategy during the past few years. We begin by providing a brief historical review to provide some perspective on how this strategy has been practiced in a myriad of ways in various parts of the world, and how it has consequently evolved in the emerging new marketplace. A more inclusive definition of stealth marketing is then proposed to conceptually understand its use in various contexts. Specifically, we propose a new typology of stealth marketing strategies based on whether businesses or competitors are aware of them, and whether they are visible to the targeted customers. We further provide suggestions of how firms can counter the stealth marketing strategies used by their competitors. Contrary to conventional wisdom, evidence is also provided about how such strategies can be used for “doing good” for society. Finally, the assessment of efficiency and effectiveness of stealth marketing strategies, and their related ethical implications, are discussed.     

Internal marketing: Concepts,measurement and application

Internal marketing issues have been discussed widely for a number of years yet this remains an area in marketing with many fundamental questions unanswered. Previous research has not satisfactorily addressed a number of crucial issues in its development. The lack of attention to detail has hindered its progress and thus relegated it to the sidelines. As part of a wider study which investigates internal marketing from a transaction cost perspective, this paper sets the scene and explores the different views and applications of internal marketing. It addresses those fundamental questions that have not been thoroughly considered in the past. What are the principles that form the foundations for internal marketing? Does internal marketing belong in all organizations? Is internal marketing merely synonymous with good human resource management or should the organization pursue internal marketing in conjunction with external marketing activities? Then, with the transaction cost framework in mind, this paper considers how internal marketing can be measured and whether it is necessary, merely nice, irrelevant or indeed illegitimate.     

Customer-Perceived Value in Long-Term Buyer–Supplier Relationships: The General B2B Insurance Sector

This article explores the role of customer-perceived value in long-term buyer–supplier relationships. This article aims to identify what creates value for organizational customers, particularly in the field of professional business-to-business (B2B) general insurance services. On the integrated grounds of customer relationship theory in marketing and the resource-based view in strategic management, qualitative research, coupled with interviews, was conducted to explore insights from various representatives of different Vietnamese general insurance firms. The findings suggest that reliability, risk coverage, reputation, technology, interpersonal skills, and technical skills are the six most important types of resources that insurance companies should possess to enhance customer-perceived value.     

Relationship frames and cooperation

We examine how various categories of relationships, and the time horizons of those relationships, affect rates of cooperation and competition in a mixed-motive decision task. We suggest that whether managers are likely to cooperate or compete depends on whether the task is framed as involving a colleague, customer, supplier, or competitor relationship. We suggest that these differences will exist only when the time horizon of the relationship is long term. We test these proposals in an experimental role-play exercise conducted by personal computer. When the time horizon is long, subjects are more likely to cooperate with customers, colleagues, and suppliers than with competitors. Counter to expectations, subjects are more likely to cooperate with competitors than with colleagues when the time horizon is short than when the time horizon is long. In addition, we show how the four business relationship frames vary along several dimensions that successfully discriminate among the relationships. The results are discussed in terms of their implications for helping managers cooperate when cooperation is appropriate.     

Customer Retention Strategies of Fast-Food Outlets in South Africa: A Focus on Kentucky Fried Chicken (KFC), Nando's,and Steers

The primary aim of the research was to critically analyze and evaluate the different customer retention strategies being implemented by fast-food outlets such as Kentucky Fried Chicken (KFC), Nando's, and Steers in South Africa. The fast-food industry in South Africa is experiencing numerous market-related changes, which range from intense globalization forces to heightening competition levels. The pressure on businesses today is further increased by a market where the customer acquisition rate is slowing, customer loyalty is decreasing, and sales cycles are lengthening. In such an environment, losing a valuable customer to a competitor can have a significant impact on profitability and growth. As a result, many companies have shifted their focus from customer acquisition to customer retention. The research was primarily concerned with assessing customer relationship management, relationship marketing, and communication through technology as strategies to maintain intimate relationships with customers. Personal interviews and in-depth interviews with the help of questionnaires were used to collect primary data in the research. The results indicated that KFC, Nando's, and Steers adopt similar marketing strategies or use the same concepts to manage their relationships with both internal and external customers and other stakeholders. These strategies and concepts include customer relationship management, relationship marketing, and technological means of communication.     

On the Edge of Buying: A Targeting Approach for Indecisive Buyers Based on Willingness-to-Pay Ranges

Targeting the “right” consumers is a core part of marketing. Whereas existing techniques to identify these consumers use demographic or psychographic variables or behaviors such as response probabilities, a proposed new targeting approach builds on consumers’ incremental responses to identify them by their willingness-to-pay (WTP) ranges. These WTP ranges reveal a consumer as a definite buyer, a definite non-buyer, or an indecisive buyer. The proposed theoretical framework indicates that indecisive buyers offer the highest incremental responses to targeted marketing mix activities and thus should be the most preferred targeting group. A sequence of three laboratory experimental studies validates the proposed approach for targeted price discounts and non-price tactics. In addition, a large-scale field experiment involving a consumer engagement campaign that includes observed purchase behavior demonstrates the high external validity and applicability of this approach.     

Mutual adaptation in buyer-supplier relationships

In buyer-supplier relationships, effective partnerships require mutual adaptation to execute strategies effectively. Using LISREL, we test a model of relational exchange factors that includes dependence, joint action and trust and their influence on the mutual adaptation of supplier and buyer firms in the U.S. automotive industry. The results of the study indicate that both economic and social dimensions of the relationship impact mutual adaptation, but that these two are not necessarily complementary. Specifically, supplier adaptation is negatively impacted by trust between supplier and buyer, but positively impacted by dependence and joint action. Buyer adaptation, on the other hand, is positively impacted by trust between the two, joint action and the adaptation undertaken by the supplier. The negative relationship between trust and supplier adaptation may be symptomatic of deeper issues in the U.S. automotive industry that should merit concern.     

Competitor orientation in successful SMEs: an exploration of the impact on innovation

The impact of market orientation on organisational performance has been the subject of many studies illustrating variance with firm size. Although small- to medium-sized enterprises (SMEs) are inherently customer-oriented, research has identified that they have significantly lower levels of competitor orientation than large firms and that competitor orientation is significantly related to organisational performance. In addition, studies have illustrated that SME success is linked to innovative problem solving, new product development and resource optimisation. SMEs are inherently innovative in how they adopt creative approaches to overcome constraints associated with their size. Given that SMEs often neglect to focus on competitors, this study explores the relationship between competitor orientation and organisational performance through an innovation lens. This study uses a qualitative research approach to investigate seven successful SMEs as case studies. The findings indicate that SMEs seeking optimal organisational performance should pay close attention to direct and indirect competitors in order to identify opportunities and build sustainable competitive businesses.     

Measuring the Consequences of Using Diverse Supplier Evaluation Teams: A Performance Frontier Perspective

This article focuses on the postperformance evaluation of a supplier set by a buyer evaluation team. It explores the use of data envelopment analysis and the assurance region technique to measure the impact that conforming or disparate evaluation teams can have on the perception of supplier performance. As a result, this work makes the case for moving the notion of performance scorecards usage to the next level. For researchers the work demonstrates the case for dual accountability and the construction of performance frontiers motivated by an actual setting using many of the important dimensions discussed in the empirical literature. For managers, the work demonstrates one way of action‐based decision making in performance management that recommends courses of action in the buyer–supplier interface. Several other practice‐based interpretations for managers are also discussed.     

A Stakeholder Perspective on Relationship Marketing

Abstract

This paper proposes a broad framework of relationship marketing using the stakeholder approach. Drawing from Peck et al. (1999) framework and proposing several modifications, the authors identify the following relational groups-supplier markets, customer markets (channels), customer markets (end users), competitor markets, external influence markets, and internal markets. The growing importance of strategic alliances is reflected in all constituent groups as well as in a proposed modification of the Berry and Parasuraman (1991) levels of relationships. This paper also re-examines the strategic role of the traditional marketing mix strategies (namely, product, price, place, and promotion) in the new relationship paradigm. Finally, implementation strategies for the stakeholder markets, in general, and customer markets, in particular, are proposed. Several propositions are derived throughout the paper, many of which can be fertile areas for future research investigations.     

An Integrative Framework of Buyer–Supplier Negative Relationship Quality and Dysfunctional Interfirm Conflict

ABSTRACT

Purpose: Problems of relationship quality and interfirm conflict in business-to-business settings are serious concerns that need to be addressed. Thus, the authors have engaged in an extensive review to promote an understanding of these complex issues. This article develops an integrated framework for analyzing wide-ranging relations between individual representatives and patterns of interfirm incompatibility for managerial control.

Methodology/approach: The review involves numerous sources that include articles and monographs. A theoretical framework is constructed to integrate fragmented empirical data. In particular, social identity and commitment-trust theories are mobilized for this framework.

Findings: The review of studies has a substantial consistency with the theoretical framework. The article outlines a causal chain from interpersonal agent dissimilarities to dysfunctional buyer–supplier relations, culminating in interfirm pathological conflict. Moderating factors in the causal chain are: agent identity differentiation (for interpersonal dissimilarity), supplier relations mismanagement (for buyer–supplier relationship quality), and interfirm opportunism (for interfirm pathological conflict). Buyer–supplier interfirm incompatibility mediates the causal link between interpersonal dissimilarity and buyer–supplier relationship quality. Identity differentiation, the validation of one’s self-image, is introduced as a process that determines buyer–supplier agent interpersonal dissimilarity judgments. This framework uses a contextual perspective. It describes interactions between observations of micro-level phenomena of interpersonal dissimilarities and macro-level models of interfirm fit. From a managerial perspective, interpersonal relations between individual buyer and supplier agents may be further strengthened by such strategies as expanding the scope of the interpersonal relationship, relaxation of role responsibilities, and volunteering business-related contact referrals.

Originality/value: A new theoretical framework has been devised to predict and explain relationship quality and interfirm pathological conflict in the business-to-business context. The framework contributes to the value of the knowledge base by serving as a means for building new diagnostic tools for assessment of interfirm behavioral issues affecting exchanges. New concepts are introduced to enhance current literature on business-to-business marketing. The framework provides concrete

indicators that operationally define ideas and enable or improve measurement for empirical modeling.     

Technological turbulence, supplier market orientation, and buyer satisfaction

The channel literature suggests that building a close relationship with key partners is one of the key strategies that channel members use to overcome the challenges of a changing environment. However, such a strategy may be ineffective when high technological turbulence exists in the buyer's market. This study focuses on the buyer's perspective in channel relationships and examines the buyer's satisfaction with outcomes resulting from engaging in relationships with a supplier. The results show that a buyer's performance is enhanced when a buyer develops a close relationship with a supplier whom it perceives to be market oriented but that a close relationship becomes detrimental to performance when technological turbulence increases. These findings suggest that managers need to be aware of the effect of technological turbulence and be alert in managing close relationships even with market-oriented suppliers.