Knowledge that Transforms

The impact of the marketing function on firm performance has been the focus of much recent research in marketing. Thus, the effect of marketing capability on firm performance, compared with that of other capabilities, such as research and development and operations, is an issue of importance to managers. To examine this issue and generate empirical generalizations, the authors conduct a meta-analysis of the firm capability–performance relationship using a mixed-effects model. The results show that, in general, marketing capability has a stronger impact on firm performance than research-and-development and operations capabilities. The results provide guidelines for managers and generate directions for further research.

Radical innovation is an important driver of the growth, success, and wealth of firms and nations. Because of its importance, authors across various disciplines have proposed many theories about the drivers of such innovation, including government policy and labor, capital, and culture at the national level. The authors contrast these theories with one based on the corporate culture of the firm. They test their theory using survey and archival data from 759 firms across 17 major economies of the world. The results suggest the following: First, among the factors studied, corporate culture is the strongest driver of radical innovation across nations; culture consists of three attitudes and three practices. Second, the commercialization of radical innovations translates into a firm’s financial performance; it is a stronger predictor of financial performance than other popular measures, such as patents. The authors discuss the implications of these findings for research and practice.

What is the relationship between product design benefits (hedonic versus utilitarian) and the postconsumption feelings of customer delight and satisfaction? The primary insights this research provides are as follows: (1) Products that meet or exceed customers’ utilitarian needs and fulfill prevention goals enhance customer satisfaction (e.g., a car with antilock brakes and vehicle stability assist), and (2) products that meet or exceed customers’ hedonic wants and fulfill promotion goals enhance customer delight (e.g., a car with panoramic sunroof and six-speaker audio system). Furthermore, the research finds that the primary antecedent feelings of satisfaction are the prevention emotions of confidence and security provided by utilitarian benefits, whereas the primary antecedent feelings of delight are the promotion emotions of cheerfulness and excitement provided by hedonic benefits. Finally, the results show that delighting customers improves customer loyalty, as measured by word of mouth and repurchase intentions, more than merely satisfying them. The authors discuss the theoretical contribution and strategic insights the research provides for product designers and marketers.

Little is known about the interface between separate marketing units and sales units. This article develops a multidimensional model of the marketing and sales interface. The model integrates a broad range of conceptual domains, including information sharing, structural linkages, power, orientations, and knowledge of marketing and sales. The authors empirically explore the conceptual model through a cross-industry study of 337 European Union–based companies. They identify five empirical archetypes of the marketing and sales interface. The taxonomy shows that the role and characteristics of marketing and sales vary a great deal. This finding challenges existing stereotypes about marketing and sales. Finally, the article explores organizational outcomes of the five configurations. The findings suggest that the most successful configurations are characterized by strong structural linkages between marketing and sales and a high extent of market knowledge in marketing.

In business markets, the long-term nature of relationships may prompt parties to conduct “business as usual,” but negative critical incidents (CIs) can cause a destabilization of these long-term relationships. The authors develop a comprehensive dynamic model of customer loyalty to account for the impact of negative CIs on both the nature and the magnitude of the relationships between satisfaction and customer share. The results indicate that CIs trigger a stronger updating of the customer relationship, which moves customers from a business-as-usual mind-set to a reconsideration of the relationship. Furthermore, nonlinearities in the relationships are much more pronounced in the presence of CIs. Depending on the relationship quality, CIs have different consequences for customer relationships, and if relationship quality is high, a negative CI can even have a positive impact on customer share.

Interactivity is a key feature of Web sites. This article identifies the determinants that enhance user perceptions of interactivity in a communication scenario in which consumers send instant messages to an e-store. Two conceptualizations of interactivity—telepresence theory and interactivity theory—predict that different antecedents (e.g., the number of clicks, response time, message type) are important. The results of Experiment 1 indicate that message type (i.e., how personal a particular message is) is the strongest predictor of interactivity perceptions. Furthermore, the findings suggest that the effects of message type on perceived interactivity and Web site effectiveness are greater when consumers are complaining than when they are inquiring about services. The results of Experiment 2 show that as the level of message personalization increases, interactivity perceptions and site effectiveness are enhanced (linear relationship). The authors discuss the implications of the findings for theory and practice and provide directions for measuring and manipulating interactivity in further research.

This article develops empirically based guidelines to assist managers in selecting or modifying package designs for achieving desired consumer responses. Seven studies identify the key types of package designs, including the factors that differentiate those package designs, and determine how these holistic designs are related to consumer brand impressions. The selection of package designs can be simplified with the use of five holistic types: massive, contrasting, natural, delicate, and nondescript designs. Sincere brands should have natural package designs, exciting brands should have contrasting designs, competent brands should have delicate designs, sophisticated brands should have natural or delicate designs, and rugged brands should have contrasting or massive designs. The authors discuss the potential trade-offs among the impressions created by holistic design types and illustrate their findings with numerous real packages.

The authors investigate the effectiveness of service transition strategies for generating shareholder value by evaluating secondary data pertaining to 477 publicly traded manufacturing firms during 1990-2005. The impact of a firm's transition to services on firm value (as measured by Tobin's q) remains relatively flat or slightly negative until the firm reaches a critical mass of service sales (20%-30%), after which point they have an increasingly positive effect. Furthermore, the effect of service sales on firm value depends on both firm and industry factors. Service transition strategies are more effective at enhancing value when the service offerings are related more to the firm's core business and when firms have more available resources (i.e., resource slack). The impact of adding services to core products on firm value amplifies as industry turbulence increases but diminishes when the firm's core products are in high-growth industries.

What is the relationship between product design benefits (hedonic versus utilitarian) and the postconsumption feelings of customer delight and satisfaction? The primary insights this research provides are as follows: (1) Products that meet or exceed customers’ utilitarian needs and fulfill prevention goals enhance customer satisfaction (e.g., a car with antilock brakes and vehicle stability assist), and (2) products that meet or exceed customers’ hedonic wants and fulfill promotion goals enhance customer delight (e.g., a car with panoramic sunroof and six-speaker audio system). Furthermore, the research finds that the primary antecedent feelings of satisfaction are the prevention emotions of confidence and security provided by utilitarian benefits, whereas the primary antecedent feelings of delight are the promotion emotions of cheerfulness and excitement provided by hedonic benefits. Finally, the results show that delighting customers improves customer loyalty, as measured by word of mouth and repurchase intentions, more than merely satisfying them. The authors discuss the theoretical contribution and strategic insights the research provides for product designers and marketers.

It seems to be common sense that to increase profits, firms should prioritize customers (i.e., focus their efforts on the most important customers). However, such a strategy might have substantial negative effects on firms’ relationships with customers treated at a low priority level. Prior research does not indicate satisfactorily whether and how customer prioritization pays off. Moreover, although customer prioritization may be strongly present in firms’ marketing strategies, firms frequently fail to implement such a strategy. Therefore, it is also important to investigate empirically by which means firms can facilitate implementation. The authors address both issues and conduct a cross-industry study with 310 firms from business-to-consumer and business-to-business contexts together with two independent validation samples. The results show that customer prioritization ultimately leads to higher average customer profitability and a higher return on sales because it (1) affects relationships with top-tier customers positively but does not affect relationships with bottom-tier customers and (2) reduces marketing and sales costs. Furthermore, the ability to assess customer profitability, the quality of customer information, selective organizational alignment, selective senior-level involvement, and selective elaboration of planning and control all positively moderate the link between a firm's prioritization strategy and actual customer prioritization.