Intro to JBR Special Issue

8/2/2019 Intro to JBR Special Issue

1/5

Pursuing the concept of marketing productivity

Introduction to the JBR Special Issue on Marketing Productivity

Alan J. Busha,*, Denise Smartb, Ernest L. Nicholsa

aFogelman College of Business, University of Memphis, Memphis, TN 38152, USAb

University of Nebraska-Omaha, Omaha, NE, USA

1. Marketing productivity: an overview

The term marketing productivity is a very elusive term.On one hand, marketing managers in most companies are

evaluated on the basis of enhancing the efficiency or produc-

tivity of their functional area. Yet, in todays extremely

competitive environment, consumers are more demanding

than ever as they constantly seek immediate access to quality

products at lower prices resulting in even more emphasis on

efficiency in marketing. Companies in the new millenium that

seekgrowth by raising prices will not be competitive. Market-

ing managers in the newmillenium must seek ways to become

more productive to survive. Ironically, the marketing litera-

ture is relatively void of research focusing on the critical and

timely issue of enhancing productivity. Hence, it is the intentof this special issueto actas a call to action for research on this

extremely important topic.

Research on marketing productivity has had quite an

unusual history. Much of the early literature on marketing

productivity was conducted in the accounting discipline

during the 1950s and 1960s. The emphasis of the early

research was on costs primarily distribution costs.

Similarly, the literature from marketing was replete with

articles that dealt with distribution cost analysis or func-

tional cost accounting. Interestingly, during this early period

many of the principles of marketing textbooks included a

chapter on marketing productivity, value added, or effi-

ciency in marketing. Many of these terms are rarely men-tioned in our textbooks today.

Charles Sevin (1965) is one of the early pioneers

attributed to introducing and advancing the concept of

productivity into the marketing discipline. In his seminal

book entitled, Marketing Productivity Analysis, Sevin in-

troduces the concept of productivity into the marketing

literature with an analogy borrowed from the subject of

mechanics in the science of physics. The concept of pro-

ductivity was defined as the ratio of effect produced to

energy expended. From a marketing perspective, productiv-

ity is based on the ratio of sales or net profits (effectproduced) to marketing costs (energy expended) for a

specific segment of the business. Beckman et al. (1973,

p. 596) provide a similar definition of marketing productiv-

ity as . . . a ratio of output, or the results of production, to

the corresponding input of economic resources, both during

a given period of time. Again, much of the literature on

marketing productivity during the 1960s and 1970s focused

on distribution costs associated with the marketing function.

Presently, there appears to be a dearth of published

research on marketing productivity. This is particularly

surprising given the fact that many experts proclaim that

we are in an era where marketing costs have been rising asother costs have fallen. Practitioners and researchers alike

are apparently in need of research addressing this critical

area of marketing productivity.

2. The articles in this special issue

The six articles in this special issue greatly advance our

understanding of marketing productivity. Though the arti-

cles represent several different approaches to the study of

marketing productivity, they are similar in the sense that

they all provide a new or novel perspective on this veryimportant subject. Both empirical and conceptual articles are

found among the different entries. The two conceptual

papers provide a broad marketing perspective on productiv-

ity. Marketing productivitys inception is traced from the

early days during our disciplines marketing management

era of the 1940s and 1950s, to Sevins seminal work in the

1960s up to todays emphasis on efficiency and effective-

ness. The four empirical papers present and test innovative

conceptual frameworks from a variety of disciplines that

focus on enhancing productivity in organizations. Overall,

the content of the empirical papers focused on enhancing the

productivity of such traditional marketing functions as sales

* Corresponding author. Tel.: +1-901-678-2437; fax: +1-901-678-4705.

E-mail address: [email protected] (A.J. Bush).

Journal of Business Research 55 (2002) 343 347

0148-2963/02/$ see front matterD 2001 Elsevier Science Inc. All rights reserved.

PII: S 0 1 4 8 - 2 9 6 3 ( 0 0 ) 0 0 1 6 3 - 6


2/5

and retailing to the more integrative functions as cycle time

research and the importance of supplier input into the new

product development process. As a group, the articles in this

special issue perform a tremendous service to the discipline

as they help advance our understanding and, hopefully,

encourage more research on this extremely important and

relatively neglected topic.

3. Marketing productivity issues and analysis

In the first article, Jag Sheth and Rajendra Sisodia

provide an excellent overview and visionary perspective

on the issues surrounding marketing productivity. The

authors respond to the recent accusations that the marketing

function is seriously failing in its fundamental objectives by

first reviewing the past research on marketing productivity,

identifying the issues in productivity measurement, and

providing suggestions for improving marketing productivity.This article proposes that in order to make significant

improvements in marketing productivity, changes are

needed at both the marketing function level and the

corporate function level. Within the marketing function

level, managers must be committed to change from a

market focus to a customer focus and from a customer

acquisition orientation to a balanced emphasis on retention

and acquisition. Emphasizing corporate-level changes can

also increase marketing productivity. Sheth and Sisodia

believe that marketing needs to convince corporate manage-

ment to treat marketing as an investment rather than an

expense. Additionally, marketing needs to articulate a new

role for itself and make the case for broadening its scope

and budget. For example, all marketing-related investments

in new product development, new programs, new

customer service initiatives should be evaluated based

upon their impact on customer equity (i.e., the net present

value of all customers at the companys target rate of return

for marketing investments).

The article concludes with a discussion of broadening

marketings scope to include all aspects of customer reten-

tion in addition to customer acquisition. Marketing produc-

tivity can be enhanced if acquisition and retention of

customers are treated in a holistic, integrated manner with

all spending on these two targets coming under marketingsdomain. This article does an excellent job of presenting a

broad perspective of marketing productivity and providing a

sound argument so firms can improve both customer loyalty

and marketing productivity simultaneously.

4. An integrated marketing performance framework

The second article in this special issue presents a pro-

gressive approach to assessing marketing productivity by

looking at it from the broader perspective of marketing

performance. This paper is particularly insightful as it clears

up any confusion one may have concerning key concepts

such as marketing performance, marketing productivity, and

marketing audits. The central focus of this paper is that

marketing productivity is only one aspect of a companys

overall marketing performance. Marketing productivity is

concerned primarily with efficiency of the marketing func-

tion, while another perspective on marketing performance marketing audits is primarily concerned with the

effectiveness of the marketing function.

In their entry, Morgan, Clark, and Gooner provide a

thorough historical perspective on marketing productivity,

marketing performance, and the marketing audit. Their

historical review reveals that the two different but related

approaches to marketing performance assessment have been

researched for many years in our literature. The marketing

productivity approach, which is primarily concerned with

the relationship between inputs and outputs, has been in the

literature since the 1965 seminal work of Charles Sevin.

The second approach to assessing marketing performancehas been more of an effectiveness approach that is

analogous to accountings financial audit. The marketing

discipline adopted its own marketing audit that focused

more on the methods, procedures, personnel, and organiza-

tion activities as they related to the companys overall

marketing performance.

The contention of this article is that marketing produc-

tivity analysis and marketing audits are subsets of the

broader notion of marketing performance assessment, and

that neither approach can be isolated from the context of

an integrated framework. Based on these two critical

historical perspectives, this paper develops a theoretically

anchored, holistic conceptual model of a normative mar-

keting performance assessment system that provides in-

sights to our understanding of marketing productivity. The

paper goes on to discuss important contextual factors that

affect the design and use of marketing performance assess-

ment systems. Through its exhaustive review and concep-

tual model, this article not only provides important

implications for practitioners but also acts as an excellent

springboard for those who are doing academic research in

this area.

5. Enhancing cycle time productivity throughorganizational learning

The third article, and the first of the empirical pieces,

examines the effects of organizational learning on cycle

time performance in the purchasing process of a Fortune

500 corporation. Hult, Ferrell, and Hurley begin the article

with a great review of the literature on cycle time and

organizational learning. The concept of cycle time is defined

and the relevant literature is reviewed to give the reader an

idea of how cycle time can play a significant role in various

marketing functions such as purchasing, product innovation,

and customer service.

A.J. Bush et al. / Journal of Business Research 55 (2002) 343347344


3/5

The paper continues with the development of a conceptual

paradigm for examining organizational learning in purchas-

ing along with a set of testable hypotheses. The literature on

organizational learning is utilized to develop this innovative

paradigm to help improve cycle time for organizations.

A sample of purchasing field managers of a Fortune 500

company was utilized to test the conceptual paradigm. Eachof the purchasing managers was asked to respond to the

questionnaire based on their dyadic relationship with an

assigned SBU field manager. This procedure yielded 400

responses of SBU field managers that directly interacted

with the purchasing managers.

Through a LISREL model, the results of this study

provide empirical evidence of linkages between organiza-

tional learning and cycle time. Persons involved in the

purchasing process receiving training via learning seminars

influenced cycle time. Moreover, the SBU representatives in

this study who attended purchasing-specific learning semi-

nars had a greater degree of achieved capacity for organiza-tional learning and this learning had positive effects on cycle

time performance. This article provides excellent justifica-

tion as to how working together and learning each others

process can often enhance productivity for all those involved.

6. The impact of integrating the supplier into the new

product development process

The fourth article, by Ragatz, Handfield, and Peterson,

explores the effect of getting suppliers involved with the

design and development process for an organizations new

products. This is the second entry in the special issue that

includes cycle time as it investigates whether or not suppli-

ers can have an impact on cost, quality, and new product

development cycle time. An organizations supplier invol-

vement may range from simple consultation on design ideas

to making suppliers fully responsible for the design of

components, systems, processes, or services they will sup-

ply. The authors propose that the result of this integration

can be better product design that is brought to market faster

and ultimately, delivers greater value for customers.

To date, only a few studies have examined empirically

the actual dynamics and factors influencing the process of

suppler integration into new product development. After anexhaustive literature review on the new product develop-

ment process, the authors develop a conceptual model of

supplier integration into new product development. The

authors utilized a set of interviews with new product

development and purchasing managers in Japan and the

US to test the various conceptual factors in their model.

Concurrently, the authors also surveyed 82 companies that

each identified a most and least successful case of supplier

integration within their company and rated the extent of use

of various management practices generally associated with

supplier integration efforts. These results were then used to

test a structural model representing the conceptual model for

the study. This process yielded a supplier integration model

that consists of two exogenous variables (need and align-

ment, and technology uncertainty) and two endogenous

variables (integrative strategies and team processes).

A survey involving 83 companies was utilized to test the

proposed model of supplier integration. A structural model

provides empirical support for the authors claims thateffective alignment of buying and supply organizations,

technology sharing, and suppler participation on the pro-

duct/project team, are all important in achieving cycle time,

quality, and cycle time results. The authors present a strong

argument for integration of the supplier into a companys

new product development process. Supplier integration can

reduce new product development costs, improve product

quality, decrease cycle time, and add value for the customer.

From a marketing standpoint, the results of this study clearly

show that everybody wins!

7. Improving sales force productivity through technology

and information

The fifth article in this special issue proposes a concep-

tual model of the organizational variables that may be

necessary to effectively implement sales force automation

systems (SFA). Authors Pullig, Maxham, and Hair present

an innovative perspective, which can lead to effective

implementation of sales force automation system. Organiza-

tions that utilize SFA to form superior market-sensing and

customer-linking capabilities are in a position to inform and

guide the internal processes of the firm that are responsible

for creating customer value, improving customer satisfac-

tion and increasing firm productivity.

Pullig, Maxham, and Hair develop a conceptual model of

SFA implementation effectiveness based on the innovation

research literature. Their proposed model posits that, for a

sales force innovation to be effectively implemented, an

organization must have both shared values that are con-

gruent with the innovation and its required behaviors, and

organizational climate factors that facilitate the use of

innovation. The authors view an SFA system as an innova-

tion specifically related to information processing in the

organization. Thus, their model considers specific climate

factors and shared values that might lead to organizationalmembers commitment to implementing the innovation. The

authors do an excellent job in reviewing the relevant

literature on innovation research before proposing their

conceptual model.

In addition to the theoretical framework, the authors use

both qualitative and quantitative analyses to develop their

model of SFA implementation effectiveness. Salespeople,

sales managers, and marketing managers located throughout

the southeastern US were utilized for both qualitative and

quantitative analyses. The results from these analyses in-

dicate that four organizational climate factors are likely to be

important in creating the conditions necessary for the

A.J. Bush et al. / Journal of Business Research 55 (2002) 343347 345


4/5

effective implementation of the SFA innovation: training,

encouragement, facilitative leadership, and organizational

support. These proposed factors are consistent with previous

conceptualizations of an effective innovation implementa-

tion climate in that they ensure skill in use of the SFA

innovation, provide incentives for use of the innovation, and

remove obstacles to innovation use.This paper is the first entry in the special issue that

focuses on enhancing the productivity of a more traditional

marketing function (i.e., sales). The authors conclude this

paper with a discussion on the benefits that should arise

from the implementation of an SFA system. Benefits to the

sales force are for outside-in processes such as improving

prospecting, account development, and the creation of buyer

profiles as well as to enhance spanning processes such as

utilization of customer information to enhance the customer

service activities of the firm. Finally, the authors suggest

several areas for future research on this relatively neglected

topic. While additional research is certainly needed on salesforce productivity, the Pullig, Maxham, and Hair article

breaks new ground regarding this issue.

8. Measuring retail productivity

The final article in this special issue by Dubelaar,

Bhargava, and Ferrarin focuses on measuring the produc-

tivity of another traditional marketing element retailing.

This paper contributes to the research on productivity

measurement by developing and testing a composite set of

measures for retail productivity including exogenous fac-

tors. Productivity is of vital concern to retailers as it operates

at both the store level as well as the strategic level to help

retailers differentiate themselves from their competitors.

This paper addresses the lack of agreement concerning

retail productivity measures in the literature by developing a

comprehensive model of the process by which a retailer

turns its inputs into outputs. After a very comprehensive

literature review on retail productivity and all of the related

constructs associated with it, the authors develop and test a

model of retail productivity. The conceptual model devel-

oped here advances the literature by assessing multiple

variables to capture the relevant constructs as opposed to

single measures that have been used in the past.Following a comprehensive pretest of the measurement

model, a mail survey of firms from New Zealand and

Australia was used to test the LISREL model. The research

findings suggest that both demand and competition are

significant to retail productivity. The authors present a

strong argument that retailers should measure outcomes in

ways that reflect both the short- and long-term performance.

The study used such outcome measures as sales, margins,

and number of transactions to reflect their thesis. Dubelaar,

Bhargava, and Ferrarin break new ground in advancing an

alternative system of thinking based on balancing various

measures of retail productivity. Furthermore, this paper

proposes that future research should include such measures

as customer satisfaction, learning, and growth objectives in

the assessment of retail productivity.

9. Future research opportunities in

marketing productivity

Several of the articles appearing in this special issue

either implicitly or explicitly addressed cycle time perfor-

mance. Although this area has not been a central focus of

marketing productivity research to date, cycle time presents

a significant opportunity for future research. The ability to

compete on the basis of time will become increasingly

important across the full range of organizational activities.

Whether it is new product or service design and develop-

ment, order fulfillment, providing information regarding

products or services, or addressing customer service and

return issues for products or services that fail to meetcustomer expectations, the time required to successfully

complete these and other critical processes will be a key

determinate of an organizations ultimate success or failure

in the marketplace. The rapid growth in electronic com-

merce only adds to this phenomenon. Given this situation,

marketing productivity research should address cycle time

as it affects both the input and the output parts of the

productivity equation. Further, if the broader perspective of

marketing productivity proposed in the article by Sheth and

Sisodia is taken, cycle time fits extremely well with the

notion of customer focus and is an important facet of

activities related to both customer acquisition and retention.

Another area that warrants inclusion in future marketing

productivity research is work conducted within the context

of the interorganizational supply chain. As organizations

increasingly focus their competitive efforts on supply chain

management (SCM), research should also be extended to

address marketing productivity from the interorganizational

perspective as well. Returning to the article by Sheth and

Sisodia, the overall supply chain will need to be customer

focused in its efforts to acquire and retain the ultimate

customer. The article by Ragatz, Handfield, and Peterson

demonstrates those closely integrating critical processes

such as new product design and development with other

supply chain member organizations leads to improvedperformance. As organizations adopt SCM approaches it

will broaden the scope of marketing activities from the

single firm to the supply chain member organizations.

Marketing productivity research that takes an interorganiza-

tional supply chain perspective is needed and would be

valued by both the academic and practitioner communities.

10. Summary and conclusion

As organizations enter the new technology-driven mil-

lenium, marketing productivity issues will be more impor-

A.J. Bush et al. / Journal of Business Research 55 (2002) 343347346


5/5

tant than ever before. The phenomenal growth of the

Internet and e-commerce can be partially attributed to the

need for efficiency and effectiveness. Although early re-

search on marketing productivity focused primarily on

costs, todays research must emphasize both cost and

convenience. Organizations today must keep costs to a

minimum while competing on the basis of time or con-venience in order to satisfy demanding customers. It is

hoped that this special issue has raised the awareness of

marketing productivity among researchers and practitioners

alike. Both the academic and practitioner communities

must realize that a key to success in the new millenium

is to improve both customer loyalty and marketing pro-

ductivity simultaneously.

11. A note of gratitude

We are grateful for the insights provided by the specialreview board for the blind reviews and insights provided on

the papers submitted for this JBR Special Issue. We very

much appreciate the sharing of time and knowledge of the

following members of the JBR Special Issue on Marketing

Productivity Review Board:

Phani Tej Adidam, University of Nebraska at Omaha,

Barry Babin, University of Southern Mississippi,

Ron Bush, University of West Florida,Rajiv P. Dant, Boston University,

Patrick Dunne, Texas Tech University,

Vijay Kannan, James Madison University,

Greg Magnan, Seattle University,

Jim Rakowski, University of Memphis,

Dan Sherrell, University of Memphis.

References

Beckman TN, Davidson WR, Talarzyx WW. Marketing. 9th ed. New York,NY: The Ronald Press, 1973.

Sevin CH. Marketing productivity analysis. New York, NY: McGraw-

Hill, 1965.

A.J. Bush et al. / Journal of Business Research 55 (2002) 343347 347

Intro to JBR Special Issue

Documents

Transcript of Intro to JBR Special Issue