AbstractDigital transformation of the marketing organization forces firms to develop new digital marketing capabilities (DMCs) to remain competitive. However, despite considerable academic and managerial interest, the value relevance of DMCs beyond the value achieved through classic marketing capabilities (CMCs) remains unclear. Similarly, research investigating the interaction effect of DMCs and CMCs is scarce. We address both research gaps by drawing on a mixed-methods approach combining in-depth interviews and a multi-industry, multisource dataset. The results reveal that DMCs significantly contribute to firm profitability beyond the influence of CMCs. Drawing on the contingent view of resource-based theory, we investigate the moderating influence of organizational and environmental contingencies on the interaction effect of DMCs and CMCs. This investigation reveals important tradeoffs that result in actionable managerial implications for realizing the complementarity potential—and preventing the substitutive potential—of a firm’s DMCs and CMCs.

This article adopts a marketing perspective to examine how wage inequality between top managers and their employees may have customer-related consequences (i.e., customer-directed effort, customer-directed opportunism, and customer-oriented culture) that affect customer satisfaction and firm performance. Surprisingly, marketing scholars and practitioners have largely neglected this pressing societal issue. The authors collect a cross-industry, multisource data set, including responses by top-level managers and objective data on wage inequality and firm performance from 106 business-to-business-focused firms (Study 1). In addition, they analyze multisource longitudinal panel data covering 521 firm-year observations for business-to-consumer-focused firms (Study 2). The results consistently reveal that wage inequality harms customer satisfaction. This relationship is mediated by customer-directed opportunism and customer-oriented culture but not customer-directed effort. Moreover, while wage inequality has a positive direct effect on short-term firm profitability, this effect is dampened by the negative indirect effect through customer-related consequences and customer satisfaction. Importantly, the positive direct effect of wage inequality on short-term profitability vanishes in the long run, whereas the adverse effect through customer satisfaction persists, leading to a nonsignificant total effect on long-term profitability. These findings may guide researchers, managers, shareholders, and policy makers in addressing the challenge of rising wage inequality.