Winning through innovation and marketing: Lessons from Australia and Vietnam

We examine the role of innovation and marketing, two functional capabilities that have the capacity to play a major role in creating superior marketplace performance in firms. Our study of the two capabilities and firms' marketplace performance also takes into account the contribution of entrepreneurial orientation (EO) and market orientation (MO) to our focal functional capabilities and marketplace performance. The results of a study of firms in Australia and Vietnam show innovation capability, marketing capability mediate the effects of the firm's MO on its marketplace performance. The results also show that the interaction of innovation and marketing capabilities significantly influences firms' marketplace performance more than they do individually. Finally, our results show that MO partially mediates the relationship between EO and innovation and marketing capabilities.     

Market orientation,marketing capabilities,and firm performance

Drawing on traditional resource‐based theory and its recent dynamic capabilities theory extensions, we examine both the possession of a market orientation and the marketing capabilities through which resources are deployed into the marketplace as drivers of firm performance in a cross‐industry sample. Our findings indicate that market orientation and marketing capabilities are complementary assets that contribute to superior firm performance. We also find that market orientation has a direct effect on firms' return on assets (ROA), and that marketing capabilities directly impact both ROA and perceived firm performance. Copyright © 2009 John Wiley & Sons, Ltd.     

Getting the most out of cross-functional cooperation: Internal structural change as a trigger for customer information use

Using customer information in the decision making of R&D and production is vital for industrial firms to survive and prosper in an increasingly competitive marketplace. Previous studies show that cross-functional cooperation may have both negative and positive effects on information use. The authors hypothesize that internal structural change positively moderates the relationship between cross-functional cooperation and information use. However, structural change also decreases the quality of cross-functional cooperation. Cross-functional knowledge increases both cross-functional cooperation and customer information use. These hypotheses are tested and supported using a data set consisting of 221 manufacturing and R&D managers in large industrial firms. The findings imply that although internal structural change increases the benefits of cooperative, cross-functional relationships in terms of customer information use, managers in volatile organizations should continue to strengthen cooperative relationships by maintaining and improving sales and marketing contact people's knowledge of manufacturing and R&D.     

Antecedents and Consequences of Cross-Functional Cooperation: A Comparison of R&D, Manufacturing, and Marketing Perspectives

By breaking down the walls among the R&D, manufacturing, and marketing functions, techniques such as concurrent engineering and quality function deployment can pave the way to more effective new product development (NPD). Recognizing the benefits of such cross-functional efforts, practitioners and researchers have examined the interrelationships among various groups in the NPD process, paying particularly close attention to the R&D–marketing interface. However, manufacturing also plays an important role in NPD. Consequently, any thorough exploration of the relationship between cross-functional cooperation and NPD success must consider manufacturing's perspective. X. Michael Song, Mitzi M. Montoya-Weiss, and Jeffrey B. Schmidt provide such a balanced perspective in a study of cross-functional cooperation during NPD in Mexican high-tech firms. Notwithstanding the differing functional goals, objectives, and reward systems present in R&D, manufacturing and marketing, they hypothesize that all three functions recognize that successful NPD requires crossfunctional cooperation. In particular, they expect that representatives of these three functional groups will share similar perceptions, regarding both the drivers and the consequences of cross-functional cooperation. The survey results support the hypothesis that R&D, manufacturing, and marketing professionals share the same perceptions, regarding the drivers and the consequences of cross-functional cooperation. Respondents from all three groups view internal facilitators as the drivers of cross-functional cooperation. In other words, regardless of their functional area, the survey respondents believe that the strongest, most direct effects on cross-functional cooperation and NPD performance come from a firm's evaluation criteria, reward structures, and management expectations. Respondents perceive these internal facilitators as having a greater effect on cross-functional cooperation than that of external forces such as market competitiveness and technological change. In fact, contrary to expectations, the respondents do not view these external forces as having a significant effect on cross-functional cooperation or NPD performance. And contrary to persistent reports about friction between technical and nontechnical personnel, all three groups perceive a strong, positive relationship between cross-functional communication and NPD performance.     

The Impact of Cross-Functional Joint Involvement Across Product Development Stages: An Exploratory Study

Cross-functional integration offers numerous, well-documented benefits for new-product development (NPD), but it also can carry significant costs. Joint involvement of R&D, manufacturing, and marketing personnel can increase the quality, the manufacturability, and the marketability of the final product. However, building consensus among these groups, with their differing perspectives and goals, may require time-consuming meetings as well as tremendous finesse from the managers who guide the NPD effort. Those managers require an approach to cross-functional integration that strikes a balance between efficiency and effectiveness. X. Michael Song, R. Jeffrey Thieme, and Jinhong Xie propose that the right mix of cross-functional involvement may differ depending on the stage in the NPD process. They also suggest that blindly promoting the involvement of all functional areas in all stages of the NPD process may actually decrease NPD performance. They test these propositions in a study that examines the relationships between new product performance and cross-functional joint involvement between R&D, manufacturing, and marketing in five major stages of the NPD process: market opportunity analysis, planning, development, pretesting, and launch. Their objective in this study is to identify patterns of effective cross-functional involvement in different NPD stages. The study uses data collected from 236 managers working in the R&D, manufacturing, and marketing departments of 16 Fortune 500 firms. Their findings suggest that new-product success may be more likely when a firm employs function-specific and stage-specific patterns of cross-functional integration than it is when the firm attempts to integrate all functions during all NPD stages. For example, during the market opportunity analysis stage, the findings suggest that joint involvement between R&D and marketing may be productive, but joint involvement between R&D and manufacturing and among all three functions may be counterproductive. The results also indicate that joint involvement among all three functions either does not have a significant effect on new product success or may be counterproductive in all stages of the NPD process. For the firms in this study, the three functions seem to take turns playing the central role in cross-functional activities. During the product planning, development, and testing phases, the role of the focal function, or communication hub, shifts from manufacturing to R&D and then to marketing. (c) 1998 Elsevier Science Inc.     

In Search of Innovation and Customer‐related Performance Superiority: The Role of Market Orientation,Marketing Capability,and Innovation Capability Interactions

Understanding the mechanisms through which firms realize the value of their market‐based knowledge resources such as market orientation is a central interest of innovation scholars and practitioners. The current study contends that realizing the performance impact of market orientation depends on know‐how deployment processes and their complementarities in functional areas such as marketing and innovation that co‐align with market orientation. More specifically, this study addresses two research questions: (1) to what extent can market orientation be transformed into customer‐ and innovation‐related performance outcomes via marketing and innovation capabilities; and (2) does the complementarity between marketing capability and innovation capability enhance customer‐ and innovation‐related performance outcomes? Drawing upon the resource‐based view and capability theory of the firm, a model is developed that integrates market orientation, marketing capability, innovation capability, and customer‐ and innovation‐related performance. The validity of the model is tested based on a sample of 163 manufacturing and services firms. In answer to the first research question, the findings show that market orientation significantly contributes to customer‐ and innovation‐related performance outcomes via marketing and innovation capabilities. This finding is important in that market‐based knowledge resources should be configured with the deployment of marketing and innovation capabilities to ensure better performance. In answer to the second research question, the findings indicate that market orientation works through the complementarity between marketing and innovation capabilities to influence customer‐related performance but not innovation‐related performance. Managers are advised to have a balanced approach to managing the deployment of capabilities. If they seek to achieve superiority in customer‐related performance, marketing capability, innovation capability, and their complementarity are essential for attracting, satisfying, building relationships with, and retaining customers. On the other hand, this complementarity would be considerably less important if firms placed greater emphasis on achieving superiority in innovation‐related performance. In contrast to many existing studies, this study is the first to model the roles of both innovation capability and marketing capability in mediating the relationship between market orientation and specific performance outcomes (i.e., innovation‐ and customer‐related outcomes).     

The Augmented Service Offering: A Conceptualization and Study of Its Impact on New Service Success

Unlike companies that produce tangible goods, service firms typically cannot rely on product advantage as a means for ensuring the success of a new service. Developing a competitive response to a tangible product may require significant investments of time and effort. In many cases, however, competitors can easily duplicate the core elements of a firm's new service. This fundamental difference between new products and new services means that managers who hope to find the keys to new-service success must look to factors other than sustainable product advantage. Chris Storey and Christopher Easingwood suggest that managers must understand the totality of the service offering from the customer's perspective. They explain that the purchase of a service is influenced not only by the service itself, but also by such factors as the service firm's reputation and the quality of the customer's interaction with the firm's systems and staff—in other words, by the augmented service offering (ASO). Using the results of a study they conducted in the consumer financial services industry in the U.K., they identify the components of the ASO, and they examine the relative contributions of these components to the success of new services. In their model, the ASO comprises three elements: the service product, service augmentation, and marketing support. The core of the ASO—the service product—includes such dimensions as product quality, product distinctiveness, and perceived risk. The study's results suggest that improvements in the service product open up new opportunities for the firm, but have only modest effects on sales and profitability. Rounding out the ASO model are service augmentation and marketing support. Service augmentation encompasses such dimensions as distribution strength, staff-customer interactions, and reputation. The customer recognizes and responds to these elements of the ASO, but they are not part of the product core. Marketing support involves those marketing and management actions that affect the quality of the product and its augmentation, even though customers typically are not aware of them. These elements include knowledge of the marketplace, training of contact staff, and internal marketing. Enhanced service augmentation has significant effects on profitability and sales for the firms in this study, but it does not offer enhanced opportunities. The marketing support elements contribute significantly to all aspects of performance for the firms in this study.     

Infusing flexibility into business-to-business firms: A contingency theory and resource-based view perspective and practical implications

Two questions motivate this research. What conditions foster flexibility and how might business-to-business firms infuse flexibility throughout their organizations? A synthesis of the strategic management, marketing, and new product development literature was undertaken, which provided an updated interdisciplinary focus. Contingency theory and the resource-based view perspective were utilized to enhance our knowledge and emphasize the importance of flexibility and organizational performance. Superior intra- and inter-firm flexibility are proposed to influence business-to-business marketplace success.     

The power of marketing within the firm: Its contribution to business performance and the effect of power asymmetry

While marketing continues to gain prominence as an orientation within the firm, concerns remain about the contributions of the marketing subunit. Given the current limited and conflicting evidence on the issue, this study responds to calls for research on the link between a powerful marketing subunit and business performance. The study draws on the critical contingencies perspective on power, which was specifically developed to study power distribution among organizational subunits. The key objectives of the study are (1) to determine whether a powerful marketing department is beneficial to business performance, (2) to reconcile conflicting evidence pertaining to the marketing function's contribution to performance beyond that of a market orientation, and (3) to investigate the effect on business performance of power asymmetry between marketing and other functions. Employing data from senior managers in medium and large manufacturing firms, the study shows that a powerful marketing function is associated with improved business performance above and beyond the contribution of a market orientation. Power asymmetry between marketing and finance/accounting and between marketing and production has a negative effect on business performance while a power asymmetry between marketing and R&D shows a positive effect on business performance. Finally, a differentiation strategy attenuates the negative performance outcomes of power asymmetry between marketing and production.     

Stakeholder theory and practice in Europe and North America: The key to success lies in a marketing approach

Corporate reputation in Europe and North America is increasingly seen as a function of how firms treat their stakeholders. In the United States, stakeholder theory has been touted as a paradigm of good management; yet despite enlightened stakeholder practice at home, US firms continue to run into problems in Europe. Wal-Mart, Microsoft, and GE have, in one way or another, all been caught off guard when doing business in Europe. This paper suggests that some of the stakeholder relations difficulties encountered by US corporations in Europe can be explained by fundamental cultural and philosophical differences between these regions that affect how stakeholders are viewed and how relations with those groups are managed. In this paper, we examine the historical and socio-political forces influencing stakeholder theory in the US and northern Europe and then use a business-to-business marketing approach to show how US firms might develop an approach to stakeholder relations that fits the northern European environment.     

Resource linkages and capability development

In this paper, we examine the different resource linkages sought by manufacturing firms through strategic alliance. We look closely at the impact of manufacturing activities on choice of resource linkage. Using a sample of Taiwanese firms, we found that product development ability and marketing distribution channels are the top priority resource linkages that Taiwanese manufacturing firms seek to establish. The authors also found it interesting that marketing know-how was not a resource commonly sought by Original Design and Manufacturing (ODM) firms, nor by Own-Brand Manufacturing (OBM) firms. Some implications are further discussed. Instead of outsourcing production to external suppliers, Taiwanese OBM firms remained committed to manufacturing as a core competence when they established their own brands overseas.     

A Cross‐National Comparative Study of Senior Management Policy,Marketing–Manufacturing Involvement,and Innovation Performance

The marketing–manufacturing interface is important to the success of product development. This research investigates the effect of senior management policies on the effectiveness of the marketing–manufacturing interface. Based on existing literature, a conceptual framework is developed that relates senior management policies, marketing–manufacturing involvement, and new product performance. The proposed framework is contingent on the national culture of the country in which product development occurs. Structural equation modeling is used to test the framework with data from a sample of 146 U.S. marketing managers and 185 Japanese marketing managers. The results suggest that a number of senior management policies are effective in promoting joint involvement between the marketing and manufacturing functions during the innovation process. While the use of formal cross‐functional integration policies was found to promote marketing–manufacturing involvement both in the United States and Japan, team leader autonomy, team rewards, and job rotation were found to promote marketing involvement in the United States but not in Japan. On the other hand, promoting marketing–manufacturing involvement via goal clarity and promotion of teamwork proved to be effective in Japan. The results have a number of implications for product development practice. Foremost among these is the finding that, despite the fundamental ideological differences separating the marketing and manufacturing functions, senior management policies can enhance the level of marketing–manufacturing involvement, and consequently can improve the likelihood of new product success. The second implication is that the effectiveness of specific senior management policies depends on national culture. Thus, managers wishing to improve the marketing–manufacturing interface should select the policies that match the culture in which the product development project is located.     

营销价值观与组织绩效关系的实证研究:兼论企业所有制的影响

本文重点讨论了营销学中作为指导企业营销活动的价值观——市场导向与利益相关者导向的理论架构，并检验了利益相关者导向与组织绩效之间的关系。同时，还针对文献中欠缺的中国企业所有制的影响，进行了分析。研究结果发现，利益相关者导向对中国企业的组织绩效具有积极影响。但中国不同所有制的企业，在利益相关者导向和组织绩效上差异很大。     

Abandon bad R&D projects with earlier marketing appraisals

The marketing concept in technology based firms is often applied too late in the product development cycle to prevent costly marketplace failure. This article stresses the need for the involvement of marketing much earlier in the development cycle and a framework for accomplishing this purpose is presented.     

Do strategic groups differ in reputation?

While most strategic group research has focused on performance implications, we consider the relationship between strategic group membership and reputation. Using strategic group identity and domain consensus concepts, we propose strategic groups have different reputations. We find significant differences exist in reputation across three identified strategic groups of U.S. property/casualty insurers, supporting our contention that reputation is a multilevel concept. Post hoc analyses suggest strategic groups with higher reputation also have higher performance on some critical measures, indicating reputation may be a mobility barrier beneficial to members of certain groups. Practitioner implications include challenges of within‐group differentiation in firm reputation. Copyright © 2000 John Wiley & Sons, Ltd.     

Basking in reflected glory: Using customer reference relationships to build reputation in industrial markets

Corporate reputation is an important intangible asset that enables firms to establish customer relationships. Customer relationships, specifically customer reference relationships, can in turn be utilized to build supplier reputation in industrial markets. The aim of this conceptual article is to analyze the combination of these two concepts. It lays the foundation for further investigations into the effectiveness of reference customer relationships in enhancing supplier reputation. By developing propositions on the determinants impacting effectiveness of reputation transfer between customer and supplier firm, implications for practice and research in business marketing and corporate reputation management are derived.     

A Causal Model of the Impact of Skills, Synergy, and Design Sensitivity on New Product Performance

Notwithstanding the best efforts of outstanding managers, project team members, researchers, and consultants, no product development plan can guarantee success. Every new products organization will experience its fair share of failures, but a firm can take steps to ensure that its failures do not outweigh its successes. By benchmarking the competition, a firm can gain insight into best practices–the factors that lead most directly to new product success. To help identify these best practices, X. Michael Song, William E. Souder, and Barbara Dyer develop and test a causal model of the relationships among the key variables leading to new product performance. The proposed model identifies five factors that lead to marketing and technical proficiency: process skills, project management skills, alignment of skills with needs, team skills, and design sensitivity. According to the model, marketing and technical proficiency directly determine product quality, and ultimately lead to new product success or failure. The causal model was tested using information on 65 completed projects–34 successes and 31 failures–from 17 large, multi-divisional Japanese firms. The study participants develop, manufacture, and market high-technology consumer and industrial products. These firms judged the success or failure of the projects in this study by using seven criteria: return on investment, profit, market share, sales, opportunities for technical leadership, market dominance, and customer satisfaction. These firms generally assigned the greatest importance to customer satisfaction, opportunity creation, and long-term growth. For the most part, the responses from these firms support the relationships presented in the causal model. According to the respondents, marketing proficiency and product quality have a strong, positive influence on their new product performance, as do process skills, project management skills, and alignment of skills and needs. The responses highlight the importance to these firms of responsiveness to customer wants and needs, as well as ensuring a close fit between project needs and the firm's skills in marketing, R&D, engineering, and manufacturing. Somewhat surprisingly, the responses do not support the model's suggested relationships between skills/needs alignment and technical proficiency or between technical proficiency and product quality.     

The role of international design orientation and market intelligence in the export performance of US machine tool companies

This paper looks at the role of product design in the export performance of US manufacturing firms in the machine tool (MT) industry. Evidence from a survey of 173 MT companies points to stronger export results among firms that initiate the design process with respect to the needs of foreign buyers. In contrast, firms that enter foreign markets with products that were originally designed for domestic clients typically exhibit weaker export sales. Firms in the latter category spend less on market intelligence than their more internationally-oriented counterparts. For both groups of firms, however, a common finding is that recent interest in export expansion has been driven by rising import penetration (loss of domestic market share). The paper concludes with a brief discussion of the implications of the empirical results for future research on export marketing.     

集体声誉危机与企业认证行为——基于“柠檬市场”治理机制的视角

中国制造业部门时有发生的行业集体声誉危机不仅抑制了消费者对中国产品的需求,也造成了企业行为扭曲。本文从“柠檬市场”不同治理机制间的交互作用入手,构建理论模型考察了行业集体声誉危机对被牵连企业认证行为的影响机理,并以中国乳制品行业为样本,运用双重差分法进行实证检验。研究发现,集体声誉危机通过破坏市场声誉机制提高了企业的认证激励,原本没有必要申请认证的高质企业比低质企业更愿意在危机后加大认证申请。此外,集体声誉危机还引发了企业非理性的过度认证,在穷尽强相关认证后,企业的认证激励并未减弱反而转向申请其他弱相关认证。额外增加的认证成本抵消了认证对销售收入增长的促进作用,导致“过度认证陷阱”,不利于企业质量提升和危机行业的转型升级。上述结论从企业认证行为扭曲这一视角拓展了有关集体声誉危机负面效应的认识,对政府避免危机发生以及完善认证行业发展有着积极的指导意义。     

Understanding the links between technological opportunism, marketing emphasis and firm performance: Implications for B2B

The capability of firms to sense and respond to changes in technologies, called technological opportunism, is of growing importance to managers as a source of competitive advantage. However, exactly how technological opportunism impacts firm performance is still not clearly understood. Furthermore, the role of marketing in this relationship, if any, has yet to be examined. Understanding this relationship is critical for marketing managers not only for determining strategic investments of resources but also for demonstrating marketing return on activities. This paper explores the links between technological opportunism and firm performance. The results show that technological opportunism has a strong positive impact on key measures of performance such as firm sales, profits and market value. Importantly, marketing emphasis is the mechanism through which the technological opportunism-performance relationship is achieved. Finally, the impact of marketing emphasis on B2B firms is different than that for B2C firms, highlighting the importance of these activities for B2B marketing managers.