Differentiation via the marketing mix

Abstract

In this paper we investigate the conjecture that increasing marketing mix specialization enhances firm performance. We start by identifying two dimensions of specialization — absolute (concentration of expenditures) and relative to competition (distinctiveness). We then propose underlying mechanisms that lead to effects of marketing mix specialization on firm performance. Using these guidelines we specify an empirical model that relates marketing mix specialization to firm performance. We estimate this model using PIMS data and find support for our propositions.