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Pursuing the concept of marketing productivity Introduction to the JBR Special Issue on Marketing Productivity
Alan J. Busha,*, Denise Smartb, Ernest L. Nicholsa
a

Fogelman College of Business, University of Memphis, Memphis, TN 38152, USA b University of Nebraska-Omaha, Omaha, NE, USA

1. Marketing productivity: an overview The term marketing productivity is a very elusive term. On one hand, marketing managers in most companies are evaluated on the basis of enhancing the efficiency or productivity of their functional area. Yet, in todays extremely competitive environment, consumers are more demanding than ever as they constantly seek immediate access to quality products at lower prices resulting in even more emphasis on efficiency in marketing. Companies in the new millenium that seek growth by raising prices will not be competitive. Marketing managers in the new millenium must seek ways to become more productive to survive. Ironically, the marketing literature is relatively void of research focusing on the critical and timely issue of enhancing productivity. Hence, it is the intent of this special issue to act as a call to action for research on this extremely important topic. Research on marketing productivity has had quite an unusual history. Much of the early literature on marketing productivity was conducted in the accounting discipline during the 1950s and 1960s. The emphasis of the early research was on costs primarily distribution costs. Similarly, the literature from marketing was replete with articles that dealt with distribution cost analysis or functional cost accounting. Interestingly, during this early period many of the principles of marketing textbooks included a chapter on marketing productivity, value added, or efficiency in marketing. Many of these terms are rarely mentioned in our textbooks today. Charles Sevin (1965) is one of the early pioneers attributed to introducing and advancing the concept of productivity into the marketing discipline. In his seminal book entitled, Marketing Productivity Analysis, Sevin introduces the concept of productivity into the marketing literature with an analogy borrowed from the subject of mechanics in the science of physics. The concept of pro-

ductivity was defined as the ratio of effect produced to energy expended. From a marketing perspective, productivity is based on the ratio of sales or net profits (effect produced) to marketing costs (energy expended) for a specific segment of the business. Beckman et al. (1973, p. 596) provide a similar definition of marketing productivity as . . . a ratio of output, or the results of production, to the corresponding input of economic resources, both during a given period of time. Again, much of the literature on marketing productivity during the 1960s and 1970s focused on distribution costs associated with the marketing function. Presently, there appears to be a dearth of published research on marketing productivity. This is particularly surprising given the fact that many experts proclaim that we are in an era where marketing costs have been rising as other costs have fallen. Practitioners and researchers alike are apparently in need of research addressing this critical area of marketing productivity.

2. The articles in this special issue The six articles in this special issue greatly advance our understanding of marketing productivity. Though the articles represent several different approaches to the study of marketing productivity, they are similar in the sense that they all provide a new or novel perspective on this very important subject. Both empirical and conceptual articles are found among the different entries. The two conceptual papers provide a broad marketing perspective on productivity. Marketing productivitys inception is traced from the early days during our disciplines marketing management era of the 1940s and 1950s, to Sevins seminal work in the 1960s up to todays emphasis on efficiency and effectiveness. The four empirical papers present and test innovative conceptual frameworks from a variety of disciplines that focus on enhancing productivity in organizations. Overall, the content of the empirical papers focused on enhancing the productivity of such traditional marketing functions as sales

* Corresponding author. Tel.: +1-901-678-2437; fax: +1-901-678-4705. E-mail address: bush@dixie-net.com (A.J. Bush).

0148-2963/02/$ see front matter D 2001 Elsevier Science Inc. All rights reserved. PII: S 0 1 4 8 - 2 9 6 3 ( 0 0 ) 0 0 1 6 3 - 6

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and retailing to the more integrative functions as cycle time research and the importance of supplier input into the new product development process. As a group, the articles in this special issue perform a tremendous service to the discipline as they help advance our understanding and, hopefully, encourage more research on this extremely important and relatively neglected topic.

3. Marketing productivity issues and analysis In the first article, Jag Sheth and Rajendra Sisodia provide an excellent overview and visionary perspective on the issues surrounding marketing productivity. The authors respond to the recent accusations that the marketing function is seriously failing in its fundamental objectives by first reviewing the past research on marketing productivity, identifying the issues in productivity measurement, and providing suggestions for improving marketing productivity. This article proposes that in order to make significant improvements in marketing productivity, changes are needed at both the marketing function level and the corporate function level. Within the marketing function level, managers must be committed to change from a market focus to a customer focus and from a customer acquisition orientation to a balanced emphasis on retention and acquisition. Emphasizing corporate-level changes can also increase marketing productivity. Sheth and Sisodia believe that marketing needs to convince corporate management to treat marketing as an investment rather than an expense. Additionally, marketing needs to articulate a new role for itself and make the case for broadening its scope and budget. For example, all marketing-related investments in new product development, new programs, new customer service initiatives should be evaluated based upon their impact on customer equity (i.e., the net present value of all customers at the companys target rate of return for marketing investments). The article concludes with a discussion of broadening marketings scope to include all aspects of customer retention in addition to customer acquisition. Marketing productivity can be enhanced if acquisition and retention of customers are treated in a holistic, integrated manner with all spending on these two targets coming under marketings domain. This article does an excellent job of presenting a broad perspective of marketing productivity and providing a sound argument so firms can improve both customer loyalty and marketing productivity simultaneously.

up any confusion one may have concerning key concepts such as marketing performance, marketing productivity, and marketing audits. The central focus of this paper is that marketing productivity is only one aspect of a companys overall marketing performance. Marketing productivity is concerned primarily with efficiency of the marketing function, while another perspective on marketing performance marketing audits is primarily concerned with the effectiveness of the marketing function. In their entry, Morgan, Clark, and Gooner provide a thorough historical perspective on marketing productivity, marketing performance, and the marketing audit. Their historical review reveals that the two different but related approaches to marketing performance assessment have been researched for many years in our literature. The marketing productivity approach, which is primarily concerned with the relationship between inputs and outputs, has been in the literature since the 1965 seminal work of Charles Sevin. The second approach to assessing marketing performance has been more of an effectiveness approach that is analogous to accountings financial audit. The marketing discipline adopted its own marketing audit that focused more on the methods, procedures, personnel, and organization activities as they related to the companys overall marketing performance. The contention of this article is that marketing productivity analysis and marketing audits are subsets of the broader notion of marketing performance assessment, and that neither approach can be isolated from the context of an integrated framework. Based on these two critical historical perspectives, this paper develops a theoretically anchored, holistic conceptual model of a normative marketing performance assessment system that provides insights to our understanding of marketing productivity. The paper goes on to discuss important contextual factors that affect the design and use of marketing performance assessment systems. Through its exhaustive review and conceptual model, this article not only provides important implications for practitioners but also acts as an excellent springboard for those who are doing academic research in this area.

5. Enhancing cycle time productivity through organizational learning The third article, and the first of the empirical pieces, examines the effects of organizational learning on cycle time performance in the purchasing process of a Fortune 500 corporation. Hult, Ferrell, and Hurley begin the article with a great review of the literature on cycle time and organizational learning. The concept of cycle time is defined and the relevant literature is reviewed to give the reader an idea of how cycle time can play a significant role in various marketing functions such as purchasing, product innovation, and customer service.

4. An integrated marketing performance framework The second article in this special issue presents a progressive approach to assessing marketing productivity by looking at it from the broader perspective of marketing performance. This paper is particularly insightful as it clears

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The paper continues with the development of a conceptual paradigm for examining organizational learning in purchasing along with a set of testable hypotheses. The literature on organizational learning is utilized to develop this innovative paradigm to help improve cycle time for organizations. A sample of purchasing field managers of a Fortune 500 company was utilized to test the conceptual paradigm. Each of the purchasing managers was asked to respond to the questionnaire based on their dyadic relationship with an assigned SBU field manager. This procedure yielded 400 responses of SBU field managers that directly interacted with the purchasing managers. Through a LISREL model, the results of this study provide empirical evidence of linkages between organizational learning and cycle time. Persons involved in the purchasing process receiving training via learning seminars influenced cycle time. Moreover, the SBU representatives in this study who attended purchasing-specific learning seminars had a greater degree of achieved capacity for organizational learning and this learning had positive effects on cycle time performance. This article provides excellent justification as to how working together and learning each others process can often enhance productivity for all those involved.

the study. This process yielded a supplier integration model that consists of two exogenous variables (need and alignment, and technology uncertainty) and two endogenous variables (integrative strategies and team processes). A survey involving 83 companies was utilized to test the proposed model of supplier integration. A structural model provides empirical support for the authors claims that effective alignment of buying and supply organizations, technology sharing, and suppler participation on the product/project team, are all important in achieving cycle time, quality, and cycle time results. The authors present a strong argument for integration of the supplier into a companys new product development process. Supplier integration can reduce new product development costs, improve product quality, decrease cycle time, and add value for the customer. From a marketing standpoint, the results of this study clearly show that everybody wins!

7. Improving sales force productivity through technology and information The fifth article in this special issue proposes a conceptual model of the organizational variables that may be necessary to effectively implement sales force automation systems (SFA). Authors Pullig, Maxham, and Hair present an innovative perspective, which can lead to effective implementation of sales force automation system. Organizations that utilize SFA to form superior market-sensing and customer-linking capabilities are in a position to inform and guide the internal processes of the firm that are responsible for creating customer value, improving customer satisfaction and increasing firm productivity. Pullig, Maxham, and Hair develop a conceptual model of SFA implementation effectiveness based on the innovation research literature. Their proposed model posits that, for a sales force innovation to be effectively implemented, an organization must have both shared values that are congruent with the innovation and its required behaviors, and organizational climate factors that facilitate the use of innovation. The authors view an SFA system as an innovation specifically related to information processing in the organization. Thus, their model considers specific climate factors and shared values that might lead to organizational members commitment to implementing the innovation. The authors do an excellent job in reviewing the relevant literature on innovation research before proposing their conceptual model. In addition to the theoretical framework, the authors use both qualitative and quantitative analyses to develop their model of SFA implementation effectiveness. Salespeople, sales managers, and marketing managers located throughout the southeastern US were utilized for both qualitative and quantitative analyses. The results from these analyses indicate that four organizational climate factors are likely to be important in creating the conditions necessary for the

6. The impact of integrating the supplier into the new product development process The fourth article, by Ragatz, Handfield, and Peterson, explores the effect of getting suppliers involved with the design and development process for an organizations new products. This is the second entry in the special issue that includes cycle time as it investigates whether or not suppliers can have an impact on cost, quality, and new product development cycle time. An organizations supplier involvement may range from simple consultation on design ideas to making suppliers fully responsible for the design of components, systems, processes, or services they will supply. The authors propose that the result of this integration can be better product design that is brought to market faster and ultimately, delivers greater value for customers. To date, only a few studies have examined empirically the actual dynamics and factors influencing the process of suppler integration into new product development. After an exhaustive literature review on the new product development process, the authors develop a conceptual model of supplier integration into new product development. The authors utilized a set of interviews with new product development and purchasing managers in Japan and the US to test the various conceptual factors in their model. Concurrently, the authors also surveyed 82 companies that each identified a most and least successful case of supplier integration within their company and rated the extent of use of various management practices generally associated with supplier integration efforts. These results were then used to test a structural model representing the conceptual model for

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effective implementation of the SFA innovation: training, encouragement, facilitative leadership, and organizational support. These proposed factors are consistent with previous conceptualizations of an effective innovation implementation climate in that they ensure skill in use of the SFA innovation, provide incentives for use of the innovation, and remove obstacles to innovation use. This paper is the first entry in the special issue that focuses on enhancing the productivity of a more traditional marketing function (i.e., sales). The authors conclude this paper with a discussion on the benefits that should arise from the implementation of an SFA system. Benefits to the sales force are for outside-in processes such as improving prospecting, account development, and the creation of buyer profiles as well as to enhance spanning processes such as utilization of customer information to enhance the customer service activities of the firm. Finally, the authors suggest several areas for future research on this relatively neglected topic. While additional research is certainly needed on sales force productivity, the Pullig, Maxham, and Hair article breaks new ground regarding this issue.

proposes that future research should include such measures as customer satisfaction, learning, and growth objectives in the assessment of retail productivity.

9. Future research opportunities in marketing productivity Several of the articles appearing in this special issue either implicitly or explicitly addressed cycle time performance. Although this area has not been a central focus of marketing productivity research to date, cycle time presents a significant opportunity for future research. The ability to compete on the basis of time will become increasingly important across the full range of organizational activities. Whether it is new product or service design and development, order fulfillment, providing information regarding products or services, or addressing customer service and return issues for products or services that fail to meet customer expectations, the time required to successfully complete these and other critical processes will be a key determinate of an organizations ultimate success or failure in the marketplace. The rapid growth in electronic commerce only adds to this phenomenon. Given this situation, marketing productivity research should address cycle time as it affects both the input and the output parts of the productivity equation. Further, if the broader perspective of marketing productivity proposed in the article by Sheth and Sisodia is taken, cycle time fits extremely well with the notion of customer focus and is an important facet of activities related to both customer acquisition and retention. Another area that warrants inclusion in future marketing productivity research is work conducted within the context of the interorganizational supply chain. As organizations increasingly focus their competitive efforts on supply chain management (SCM), research should also be extended to address marketing productivity from the interorganizational perspective as well. Returning to the article by Sheth and Sisodia, the overall supply chain will need to be customer focused in its efforts to acquire and retain the ultimate customer. The article by Ragatz, Handfield, and Peterson demonstrates those closely integrating critical processes such as new product design and development with other supply chain member organizations leads to improved performance. As organizations adopt SCM approaches it will broaden the scope of marketing activities from the single firm to the supply chain member organizations. Marketing productivity research that takes an interorganizational supply chain perspective is needed and would be valued by both the academic and practitioner communities.

8. Measuring retail productivity The final article in this special issue by Dubelaar, Bhargava, and Ferrarin focuses on measuring the productivity of another traditional marketing element retailing. This paper contributes to the research on productivity measurement by developing and testing a composite set of measures for retail productivity including exogenous factors. Productivity is of vital concern to retailers as it operates at both the store level as well as the strategic level to help retailers differentiate themselves from their competitors. This paper addresses the lack of agreement concerning retail productivity measures in the literature by developing a comprehensive model of the process by which a retailer turns its inputs into outputs. After a very comprehensive literature review on retail productivity and all of the related constructs associated with it, the authors develop and test a model of retail productivity. The conceptual model developed here advances the literature by assessing multiple variables to capture the relevant constructs as opposed to single measures that have been used in the past. Following a comprehensive pretest of the measurement model, a mail survey of firms from New Zealand and Australia was used to test the LISREL model. The research findings suggest that both demand and competition are significant to retail productivity. The authors present a strong argument that retailers should measure outcomes in ways that reflect both the short- and long-term performance. The study used such outcome measures as sales, margins, and number of transactions to reflect their thesis. Dubelaar, Bhargava, and Ferrarin break new ground in advancing an alternative system of thinking based on balancing various measures of retail productivity. Furthermore, this paper

10. Summary and conclusion As organizations enter the new technology-driven millenium, marketing productivity issues will be more impor-

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tant than ever before. The phenomenal growth of the Internet and e-commerce can be partially attributed to the need for efficiency and effectiveness. Although early research on marketing productivity focused primarily on costs, todays research must emphasize both cost and convenience. Organizations today must keep costs to a minimum while competing on the basis of time or convenience in order to satisfy demanding customers. It is hoped that this special issue has raised the awareness of marketing productivity among researchers and practitioners alike. Both the academic and practitioner communities must realize that a key to success in the new millenium is to improve both customer loyalty and marketing productivity simultaneously.

much appreciate the sharing of time and knowledge of the following members of the JBR Special Issue on Marketing Productivity Review Board: Phani Tej Adidam, University of Nebraska at Omaha, Barry Babin, University of Southern Mississippi, Ron Bush, University of West Florida, Rajiv P. Dant, Boston University, Patrick Dunne, Texas Tech University, Vijay Kannan, James Madison University, Greg Magnan, Seattle University, Jim Rakowski, University of Memphis, Dan Sherrell, University of Memphis.

11. A note of gratitude We are grateful for the insights provided by the special review board for the blind reviews and insights provided on the papers submitted for this JBR Special Issue. We very

References
Beckman TN, Davidson WR, Talarzyx WW. Marketing. 9th ed. New York, NY: The Ronald Press, 1973. Sevin CH. Marketing productivity analysis. New York, NY: McGrawHill, 1965.