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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
8/2/2019 Intro to JBR Special Issue
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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
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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
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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
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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