The three strategic priorities of marketing excellence

August 05, 2020

Researchers from University of Mannheim and University of Texas - Austin published a new paper in the Journal of Marketing that examines the nature and effectiveness of marketing excellence as a business strategy. The study addresses two fundamental questions: How do managers understand and exercise marketing excellence? and How do investors evaluate marketing excellence?

The study, forthcoming in the Journal of Marketing, is titled "Marketing Excellence: Nature, Measurement, and Investor Valuations" and is authored by Christian Homburg, Marcus Theel, and Sebastian Hohenberg.

In one study, the research team conducted 39 in-depth interviews with senior managers of global companies and augmented the data with secondary data on 150 firm strategies, applying the theories-in-use methodology. Findings reveal that marketing excellence is a strategy focused on achieving organic growth by executing three priorities: marketing ecosystem, end-user, and marketing agility. The marketing ecosystem priority is a firm's strategic means of growing the business by developing mutually beneficial networks in the proximal and distal firm environment. The end-user priority promotes engaging with the final customers who apply or consume the firm's offering and leveraging the final customer insights for growing the business. Finally, the marketing agility priority facilitates the execution of growth activities by the marketing organization and its members through simplified structures and processes, fast decision making, and trial and error learning. "What we have done," explains Homburg, "is expose the components of marketing excellence and advance the understanding of what marketing excellence is. This insight can guide managers about where they can invest in marketing excellence and how to communicate marketing excellence to internal and external stakeholders."

The second study quantifies the impact of marketing excellence on firm value (i.e., investors' expectations of future cash flows) and compares that effect with the effects of other marketing strategy concepts such as market orientation and marketing capabilities. Using 8,317 letters to shareholders from 1,727 annual reports between 1998 and 2016, the researchers measured marketing excellence with two methods, a machine learning algorithm and an original dictionary, and then assessed the impact of marketing excellence on firm value. The machine learning algorithm (4.80%) and the original dictionary (8.58%) had one-year abnormal returns significantly higher than benchmark portfolios. These performance metrics are even higher in the period from 2014 to 2017 where the marketing excellence portfolio achieved average annual returns of 16.82%, significantly outstripping market orientation and marketing capabilities portfolios (1.95% and 8.53% respectively). These results show that investors value marketing excellence more highly than they value strategies based on market orientation and marketing capabilities.

In addition to contributing to marketing academia, study results have important implications for managers and educators. Theel and Hohenberg elaborate, "First, we recommend that managers use the results to coordinate and communicate marketing excellence. For instance, the findings offer guidance for developing marketing excellence checklists and key performance indicators. Second, we recommend that educators use the findings to explain to future managers the strategic role of marketing in driving firms' organic growth." The researchers also recommend that educators develop new courses that align firms' decision fields for growth in terms of the marketing ecosystem, end user, and marketing agility. The research provides educators with direction on the content and scope of such courses.
-end-
Full article and author contact information available at: https://doi.org/10.1177/0022242920925517

About the Journal of Marketing

The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the American Marketing Association since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Christine Moorman (T. Austin Finch, Sr. Professor of Business Administration at the Fuqua School of Business, Duke University) serves as the current Editor in Chief.

https://www.ama.org/jm

About the American Marketing Association (AMA)

As the largest chapter-based marketing association in the world, the AMA is trusted by marketing and sales professionals to help them discover what's coming next in the industry. The AMA has a community of local chapters in more than 70 cities and 350 college campuses throughout North America. The AMA is home to award-winning content, PCM® professional certification, premiere academic journals, and industry-leading training events and conferences.

https://www.ama.org/

American Marketing Association

Related Science Articles from Brightsurf:

75 science societies urge the education department to base Title IX sexual harassment regulations on evidence and science
The American Educational Research Association (AERA) and the American Association for the Advancement of Science (AAAS) today led 75 scientific societies in submitting comments on the US Department of Education's proposed changes to Title IX regulations.

Science/Science Careers' survey ranks top biotech, biopharma, and pharma employers
The Science and Science Careers' 2018 annual Top Employers Survey polled employees in the biotechnology, biopharmaceutical, pharmaceutical, and related industries to determine the 20 best employers in these industries as well as their driving characteristics.

Science in the palm of your hand: How citizen science transforms passive learners
Citizen science projects can engage even children who previously were not interested in science.

Applied science may yield more translational research publications than basic science
While translational research can happen at any stage of the research process, a recent investigation of behavioral and social science research awards granted by the NIH between 2008 and 2014 revealed that applied science yielded a higher volume of translational research publications than basic science, according to a study published May 9, 2018 in the open-access journal PLOS ONE by Xueying Han from the Science and Technology Policy Institute, USA, and colleagues.

Prominent academics, including Salk's Thomas Albright, call for more science in forensic science
Six scientists who recently served on the National Commission on Forensic Science are calling on the scientific community at large to advocate for increased research and financial support of forensic science as well as the introduction of empirical testing requirements to ensure the validity of outcomes.

World Science Forum 2017 Jordan issues Science for Peace Declaration
On behalf of the coordinating organizations responsible for delivering the World Science Forum Jordan, the concluding Science for Peace Declaration issued at the Dead Sea represents a global call for action to science and society to build a future that promises greater equality, security and opportunity for all, and in which science plays an increasingly prominent role as an enabler of fair and sustainable development.

PETA science group promotes animal-free science at society of toxicology conference
The PETA International Science Consortium Ltd. is presenting two posters on animal-free methods for testing inhalation toxicity at the 56th annual Society of Toxicology (SOT) meeting March 12 to 16, 2017, in Baltimore, Maryland.

Citizen Science in the Digital Age: Rhetoric, Science and Public Engagement
James Wynn's timely investigation highlights scientific studies grounded in publicly gathered data and probes the rhetoric these studies employ.

Science/Science Careers' survey ranks top biotech, pharma, and biopharma employers
The Science and Science Careers' 2016 annual Top Employers Survey polled employees in the biotechnology, biopharmaceutical, pharmaceutical, and related industries to determine the 20 best employers in these industries as well as their driving characteristics.

Three natural science professors win TJ Park Science Fellowship
Professor Jung-Min Kee (Department of Chemistry, UNIST), Professor Kyudong Choi (Department of Mathematical Sciences, UNIST), and Professor Kwanpyo Kim (Department of Physics, UNIST) are the recipients of the Cheong-Am (TJ Park) Science Fellowship of the year 2016.

Read More: Science News and Science Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.