Alexander Krasnikov & Satish Jayachandran
Executive Summary
Do investments in marketing capabilities enhance firm performance? This has been an issue of considerable significance to managers and academics. Industry surveys often provide evidence that senior management is unsure of the value of the marketing function and, as a consequence, might be less inclined to invest in developing marketing capabilities. Therefore, the effect of marketing capability on firm performance, compared with that of other capabilities, such as research and development (R&D) and operations, is of substantial empirical relevance. To provide insight into the relative impacts of marketing, R&D, and operations capabilities on firm performance, the authors aggregate findings from prior research and conduct a meta-analysis using a mixed-effects model. By focusing on the characteristics of the knowledge underlying these capabilities, the authors argue that marketing capability should have a stronger association with firm performance than R&D and operations capabilities. The results of the data compiled from prior research support the argument that marketing capability has a stronger association with performance than R&D and operations capabilities. However, all three capabilities have strong, positive association with performance. Marketing and R&D capabilities also have stronger associations with market performance measures, such as market share, profitability, and sales, than operations capabilities. In addition, operations capability has a stronger effect on efficiency performance measures, such as cost reduction, lead-time reduction, and time to market, than on market performance measures. The results highlight the importance of marketing assets for firm performance and emphasize the potential folly of not focusing on investments that build marketing capability. Overall, by summarizing the results from a large body of research, the authors provide findings that advance the dialogue on the role of marketing in firms.
Biography
Alexander Krasnikov is Assistant Professor of Marketing in the Department of Marketing, School of Business, at George Washington University. Previously, he was working as a postdoctoral research fellow with the Center for Research in Technology and Innovation, Kellogg School of Management, at Northwestern University. He is studying financial and performance outcomes of implementation of marketing capabilities with a specific emphasis on customer-centric capabilities, customer relationship management, and valuation of market-based assets. Recently, his research was awarded a grant by Marketing Science Institute. In 2007, he received a PhD in Marketing from the Moore School of Business at the University of South Carolina. He holds an MBA from University of North Carolina. Before his education in the United States, he earned medical degree from Rostov-na-Donu State Medical University (Russia). He worked in sales and marketing positions with two global pharmaceutical companies in Russia.
Satish Jayachandran is Moore Research Fellow and Associate Professor of Marketing in the Moore School of Business at the University of South Carolina. His research interests are in the area of marketing strategy and, specifically, the responsiveness of organizations to changes in the market environment. Currently, Satish is studying customer relationship management and how the structure of marketing channels influences brand performance. His research has been published in Journal of Marketing, Journal of Marketing Research, and Journal of the Academy of Marketing Science. With his coauthors, Satish was a recipient of the Harold H. Maynard award for 2001 from the Journal of Marketing for the article that made the most significant contribution to marketing theory and thought. He also has six years of professional experience that includes information technology marketing and advertising. At the Moore School of Business, Satish teaches the core Marketing Management course, as well Product and Brand Management, Marketing Communications, and Internet Marketing electives in the IMBA program. In addition, he teaches the Marketing Strategy seminar in the PhD program and a Marketing Communications elective in the undergraduate program. Satish is currently serving as the PhD Program Director for the Marketing Department and as a member of the Faculty Council. He is a member of the editorial review board of Journal of the Academy of Marketing Science.
Journal of Marketing, Vol. 72, No. 4, July 2008
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