The Impact of Marketing Knowledge among Managers on Marketing Capabilities and Business Performance

Abstract

This study applied structural equation modeling to examine the relationships among marketing management, marketing capabilities and business performance for a firm. Survey data of marketing managers from Taiwanese service firms and consumer goods manufacturers was used to-test the relationships between the constructs used in this study. The result demonstrates that marketing generation, dissemination and storage can enhance the marketing capabilities of distribution channels, marketing research and product/service development, promotions and pricing. Analysis also indicates that firms with superior marketing capabilities significantly outperform their rivals in term of business performance. However, marketing management only indirectly affects business performance through its association with marketing capabilities. Firms that manage to develop superior marketing capabilities through their marketing management improve their business performance. Introduction The world is entering a new knowledge society in which is the major form of capital. The knowledge-based view of the firm holds that is the key resource of firms for creating and sustaining economic rent. According to this view, sustainable competitive advantages and differences in business performance result from firms having unique bases and their ability to manage these different areas. Prahalad and Hamel (1990) also argued that management is increasingly considered a main source of distinctive capabilities and competitive advantage. Organizations thus are becoming knowledge-based (Nonaka and Takeuchi, 1995). Moreover, numerous recent articles have identified as the main source of competitive advantage. However, despite the theoretical strength of the idea that creates competitive advantages for firms, research on marketing management is scare, contrasting with management research concerning other disciplines (especially operations management, information management). Instead, general marketing and strategic management academics have focused on market orientation and organizational learning. Similarly, the relationship between marketing capabilities and business performance has received little empirical attention. Research demonstrating the effect of marketing management on marketing capability and business performance is lacking. Furthermore, a review of the general marketing and strategic management literature reveals a lack of research on the conceptualization, operationalization and measurement of marketing management. Against this backdrop, this study proposes and tests a model of the effect of marketing management on marketing capabilities and business performance. Marketing management Marketing know-how is conceived more as procedural than as declarative (Nonaka, 1994). Whereas declarative refers to information or factual statements, procedural describes knowing how to do something. The term marketing management encompasses the generation, dissemination and storage of marketing knowledge. The process perspective of management holds that generation is the process by which is obtained. Meanwhile, dissemination describes the process by which from different sources is shared and thus stimulates new or understanding. Moreover, storage is the means by which is stored for future use. Additionally, marketing describes organized and structured information regarding markets, customers, competitors and trends. Marketing management is a set of processes that generate, disseminate and store of customers and their preferences, competitors, products, distribution channels and trends. This study takes process to mean a series of activities. …