The Role of Marketing: Christine Moorman & Roland T. Rust
The Role of Marketing: Christine Moorman & Roland T. Rust
The Role of Marketing: Christine Moorman & Roland T. Rust
Rust
L
ooking broadly at the marketing literature and prac- As marketing gains increasing prominence as a set of
tice, it appears that during the past ten years there has processes that all functions participate in deploying, a criti-
been a movement toward thinking of marketing less cal issue that arises is the specific contributions of the mar-
as a function and more as a set of values and processes that keting function. Specifically, what role should the marketing
all functions participate in implementing. In this view, mar- function play, if any, in a firm that is market-oriented? Re-
keting becomes everybody’s job, which potentially diffuses flecting this concern, the Marketing Science Institute’s
the marketing function’s role but increases marketing’s in- 1996–1998 research priorities included investigations into
fluence (Greyser 1997). As McKenna (1991, p. 68) notes, “Marketing as a function (big M) in relation to marketing as
“Marketing is everything and everything is marketing,” or as a process and a vision (little m) in the future” (Marketing
Haeckel (1997, p. ix) states, “Marketing’s future is not a Science Institute Research Priorities 1996*, p. 6). In re-
function of business, but is the function of business.” sponse, Day (1997, p. 69) suggests that many find a trade-
The empirical literature on market orientation is the off between “developing deep functional expertise through
most profound indication of this change in perspective. Al- specialization vs. subordinating functions to teams manag-
though it has been defined in a variety of ways, several em- ing linked processes.” Likewise, Workman, Homburg, and
pirical studies of business organizations indicate that an or- Gruner (1998) refer to this as the “cross-functional disper-
ganizationwide market orientation has a positive impact on sion of marketing activities” and predict that it will lead to a
the financial performance of firms and their new products reduction in the need for a strong marketing function.
(Day and Nedungadi 1994; Deshpandé, Farley, and Webster In this article, we argue for the value of the marketing
1993; Jaworski and Kohli 1993; Kohli, Jaworski, and Kumar function beyond an organizationwide market orientation.
1993; Moorman 1995; Narver and Slater 1990). Likewise, These arguments suggest that the marketing function can
important advances have been made in conceptualizing the and should coexist with a market orientation and that the ef-
key capabilities exhibited by market-oriented firms (Day fectiveness of a market orientation depends on the presence
1990, 1994; Kohli and Jaworski 1990; Webster 1992, 1997). of strong function that includes marketing. To make our
case, we present a framework that defines the scope of the
marketing function and how it operates in the cross-func-
tional world of a market-oriented firm. At the heart of this
framework is the idea that the marketing function facilitates
Christine Moorman is Professor of Marketing, Fuqua School of Business,
the link between the customer and various key processes
Duke University. Roland T. Rust is Madison S. Wigginton Professor of Man-
agement and Director, Center for Service Marketing, Owen Graduate within the firm (Day 1994). We examine both the value of
School of Management, Vanderbilt University. This research has been the marketing function and its scope in a large-scale empir-
sponsored by a grant from the Marketing Science Institute (MSI). The au- ical effort.
thors appreciate the research assistance of William Mackinson, Azure
Fudge, Emily Goff, and Charles Mertes; the comments of Jeff Inman, Rich
Oliver, Rebecca J. Slotegraaf, and participants at the MSI conference on
Fundamental Issues in Marketing, where a previous version of the article
was presented; and the guidance of the Special Issue editors and review- *Authors were limited in the number of references used in text,
ers in preparing this article. therefore, those references marked with an * are available at
www.ama.org/pubs/jm and at www.msi.org.
Journal of Marketing
180 / Journal of Marketing, Special Issue 1999 Vol. 63 (Special Issue 1999), 180–197
The Marketing Function in a Other anecdotal evidence points to a de-emphasis on the
formal marketing function as its work is either outsourced
Market-Oriented Firm (Cook 1993*; Curtis 1997*; Leggett 1996*; Morrall 1995*;
Structural Approaches to Marketing Organization Moulton 1997*) or assigned to cross-functional teams
(Brady and Davis 1993*; Doyle 1995*) or other organiza-
The question of how to structure an organization to maxi-
tional units (Sheth and Sisodia 1995*). More formal exami-
mize performance has been a source of enduring debate in
nations indicate that the loss of marketing as a function and
organizational research, strategy research, and marketing.
its integration across functions may be less common than
Within this broad topic, the specific question we address
these observations suggest (Piercy 1998*).
pertains to the proper organization of marketing in firms.
In this article, we are not interested in whether market-
Two specific structures that currently are being scrutinized
ing as a function is actually on the decline. We take no stand
by practitioners and that offer distinctive theoretical ap-
on this issue. Instead, we examine the contribution of a dis-
proaches for scholars are examined here: a functional mar-
tinct marketing function as organizations adopt a process or
keting organization and a process marketing organization.
cross-functional structure to the management of marketing.
A functional marketing organization refers to the con-
centration of the responsibility for marketing activities Theoretical Issues in Marketing Organization
(knowledge and skills) within a group of specialists in the
organization.1 The benefits of functional structures are well In addition to the critical substantive questions surrounding
documented and include enhanced efficiency and ability to different forms of marketing organization, this topic also
develop specialized, distinctive capabilities (e.g., Thompson raises important and enduring theoretical questions related
and Strickland 1983). The risks include the challenge of co- to the value of what have been termed variously as shared or
ordination between specialized functions, interfunctional integrated knowledge and skills in organizations (e.g.,
conflict, functional myopia, and overspecialization. A mar- Dougherty 1992; Lawrence and Lorsch 1967). Contempo-
keting process organization refers to the dispersion of mar- rary research focusing on the value of shared knowledge and
keting activities (knowledge and skills) across nonspecial- skills in organizations suggests that integrated approaches
ists in the organization (Workman, Homburg, and Gruner are necessary because most of the work in organizations cuts
1998). This approach can take a variety of forms. For exam- across different knowledge and skill domains, such as prod-
ple, Kohli and Jaworski (1990, p. 3) define market orienta- uct development or supply chain management (e.g., Day
tion as the organizationwide generation, dissemination, and 1994). This view would be consistent with the cross-func-
responsiveness to market intelligence. Consistent with a tional dispersion of marketing or the process marketing or-
process structure, they suggest that a market orientation in- ganization. Integrated knowledge and skills have been
volves multiple departments sharing information about cus- linked to reduced conflict (Frankwick et al. 1994; Gupta,
tomers and engaging in activities designed to meet cus- Raj, and Wilemon 1986*) and increased communication
tomers needs (see also Narver and Slater 1990). Day (1994, (Griffin and Hauser 1992*; Moenaert and Souder 1990*,
p. 38) describes two key cross-functional processes of mar- 1996*) in organizations. Stronger functional orientations,
ket-driven organizations: market-sensing and customer-link- conversely, have been found to reduce information sharing
ing activities. within firms (Fisher, Maltz, and Jaworski 1997*).
A great deal of commentary suggests a tension between Other research points to the value of specialized or dif-
these two approaches to marketing organization in firms ferentiated knowledge and skills. Hambrick, Cho, and Chen
(Day 1996*). For example, some scholars have suggested (1996*) recently provided evidence that higher levels of
that firms are reducing the size and resources associated functional heterogeneity among top management team
with formal marketing functions, even as they move toward members were significantly related to growth in market
embracing an organizationwide market orientation. Greyser share and profits in the airline industry. Bantel and Jackson
(1997, p.14) refers to this as “a simultaneous upgrading of (1989*) find that top team function heterogeneity increased
the orientation and downsizing of the formal function.” the level of innovation in the banking industry. Reed and
Webster (1989, p. 6) notes, “Marketing in many companies DeFillippi (1990*) suggest that differentiation is an impor-
has been ‘pushed out’ into the operating units of the busi- tant source of causal ambiguity in an organization that can
ness, especially in those companies that are consciously erect competitive barriers to imitation (see also Madhavan
‘disintegrating’ their organizations ... I think that marketing and Grover 1998*). Still other work suggests a contingent
as a stand alone function in the typical organization will be- view of the value of specialized knowledge and skills in or-
come extremely rare.” Wind (1996, p. iv) likewise states, ganizations. For example, in a study focused on new prod-
“Marketing, as a management function, appears to be in de- uct development, Moorman and Miner (1997) demonstrate
cline. Marketing as a management philosophy and orienta- that higher levels of specialized knowledge and skills had a
tion, espoused and practiced throughout the corporation, is positive impact on new product innovation levels only in
however seen increasingly as critical to the success of any conditions of high environmental turbulence. Likewise,
organization.” Dougherty (1992) claims that the value of specialized
knowledge and skills is dependent on the presence of effec-
1In reality, a firm can outsource a marketing function as well as tive routines for managing complex and novel interdepart-
maintain one internally. Our predictions are expected to hold mental relations.
across both internal and external marketing functions. We address It is our opinion that there is room for a third view on the
possible differences subsequently. value of specialized (differentiated) versus shared (integrat-
FIGURE 1
Functional Influences on the Connections Between Central Elements of the Firm
Customer
M a na
ark ge
M
eti me
Marketing, Operations
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De atio
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se t i n
Re arke
M
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Human Resources,
Operations Accounting
Financial
Product Service Delivery
Accountability
Accounting, Management
Information Systems
Human Resources
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Top
Management
source managers). Approximately 200 managers of each LR = late responders) are as follows: customer–product connection
type were sampled from relevant lists. (ER = 4.14, LR = 4.13, F(322) = .10), customer–service delivery
link (ER = 3.51, LR = 3.38, F(325) = .48), customer–finance link
Each manager was mailed a copy of the questionnaire (ER = 4.08, LR = 4.04, F(327) = .16), firm financial performance
and a cover letter explaining the study goals. A dollar at- (ER = 4.51, LR = 4.35, F(324) = 1.31), customer relationship per-
tached to the cover letter and an advance copy of the results formance (ER = 4.91, LR = 4.98, F(324) = .50), and new product
were offered as incentives for participating. Three weeks performance (ER = 3.97, LR = 3.90, F(317) = .26).
Jaworski and Kohli Narver and Slater Jaworski and Kohli Narver and Slater Jaworski and Kohli Narver and Slater
Whether firm is in a .202 (.230) .154 (.219) .117 (.242) .121 (.241) –.034 (.269) –.133 (.274)
consumer industry
Stage in product –.193 (.067)* –.187 (.062)* –.148 (.071)** –.140 (.068)** –.177 (.081)** –.189 (.080)**
life cycle
Firm size .073 (.070) .001 (.062) .032 (.073) .027 (.068) .061 (.081) .067 (.078)
Market orientation 1a –.125 (.209) .449 (.118)* –.031 (.220) .069 (.129) .235 (.237) .339 (.148)**
Market orientation 2b .030 (.171) .007 (.111) –.223 (.180) .166 (.122) –.221 (.192) .057 (.135)
Market orientation 3c .434 (.225)*** –.012 (.085) .416 (.237)*** –.165 (.094)*** .541 (.256)** .027 (.104)
Value of the marketing .184 (.092)** .171 (.087)** .223 (.097)** .243 (.096)** .248 (.105)** .255 (.107)**
function
Degrees of freedom 7,112 7,111 7,112 7,110 7,109 7,107
F-statistic 3.073 (p = .005) 5.546 (p = .000) 2.076 (p = .052) 2.340 (p = .029) 3.873 (p = .001) 3.932 (p = .001)
Adjusted R2 .114 .224 .063 .078 .156 .161
aIn Jaworski and Kohli (1993), the first dimension is organizationwide market information acquisition, and in Narver and Slater (1990), it is customer orientation.
bIn Jaworski and Kohli, the second dimension is organizationwide market information dissemination, and in Narver and Slater, it is cross-functional information sharing.
cIn Jaworski and Kohli, the third dimension is organizationwide market responsiveness, and in Narver and Slater, it is competitor orientation.
dStandardized coefficients are used in this table and throughout the remainder of the article.
ese refers to the standard error of the estimated coefficients.
*p < .01.
**p < .05.
***p < .10.
connection and firm nature will be positive and signifi- The Future of Marketing in
cant. Table 4 contains the overall results and the results by
function.
Organizations
Results indicate that the overall model is significant (ad- The preceding empirical findings support the contention
justed R2 = .242, F(5,319) = 21.35, p < .000), and parameter that, though market orientation is undeniably important, the
estimates indicate support for the hypothesized relation- marketing function continues to have an important role to
ships. Specifically, there is a positive and significant rela- play. In this section, we explore the theoretical and substan-
tionship between marketing’s customer–product connection tive issues raised by our findings. Our ideas focus on pro-
knowledge and skills and the value of marketing within the viding the field of marketing with a stronger basis for build-
firm (b = .281, t = 4.844, p < .000), in support of H2. Like- ing critical connections in firms and developing a
wise, there is a positive and significant relationship between sustainable knowledge base that can drive marketing educa-
marketing’s customer–financial accountability connection tion and practice in the twenty-first century.
knowledge and skills and the value of marketing within the
firm (b = .193, t = 3.172, p < .001), in support of H3. Final- Organizing a Strong Marketing Function into a
ly, though the main effect of marketing’s customer–service Market-Oriented Firm
delivery connection knowledge and skills was not a signifi- There are various organizational structures that allow for the
cant predictor of marketing’s value within the firm, the in- integration of strong functions in a process structure such as
teraction of this connection and the nature of the firm is a market orientation. The appropriateness of any structure for
marginally significant and positive predictor (b = .044, t = the marketing function depends on several contingencies in
1.869, p < .06). This indicates that marketing’s customer– both the environment and the organization (Workman, Hom-
service delivery connection knowledge and skills have an burg, and Gruner 1998), as we highlight subsequently.
impact on the value of marketing within the firm when the One approach has been referred to as a “hybrid organi-
firm is more a service provider than a goods producer. This zation” (Day 1997) or “matrix management” (Davis and
result provides conditional support for H4. Lawrence 1977*). However, as opposed to traditional matrix
management, which involves a temporary overlay of project
How the Marketing Function’s Customer groups on a functional design, the organizational scheme we
Connections Contribute Beyond the Contribution suggest overlays the customer connections on the function-
of a Market Orientation al design in a more permanent way. This could be imple-
In this section, we extend our analysis by examining the ef- mented by functions having subgroups that reflect the con-
fect of specific marketing function knowledge and skills on nections they help manage. Therefore, the marketing
firm performance. In particular, we test the proposition that function might have three subgroups related to product, ser-
the more the marketing function develops knowledge and vice delivery, and financial accountability. Likewise, opera-
skills related to managing the three customer connections, tions would have product and service delivery subgroups.
the more it will contribute to firm performance beyond the Managers in these subgroups then would be members of
contribution of an organizationwide market orientation. horizontal, cross-functional teams and activities.
This extends H1, which focused on the more general If the marketing function were organized into a sub-
point that a valued marketing function contributes beyond group for each connection, it probably would appear as fol-
an organizationwide market orientation. To test this predic- lows: The customer–product subgroup would be similar to
tion, we used the same procedure to test H1. Specifically, a the existing marketing group in many companies. This
hierarchical regression model was examined in which the group would manage products and brands and be responsi-
three control variables (step 1), organizationwide market ble for product-related decisions, such as price, promotion,
orientation (step 2), and marketing’s knowledge and skills and product design and redesign. The customer–service de-
related to the three connections (step 3) were entered into livery subgroup would be similar to a typical customer sat-
the model. Because we were interested in the overall impact isfaction/retention group. Its responsibilities would include
of marketing function knowledge and skills, not a specific measuring, monitoring, and improving customer satisfaction
set of knowledge or skills, we created a new variable that re- and service delivery and managing the organization’s loyal-
flected the summation of the marketing function’s three cus- ty and retention programs. The customer–financial account-
tomer connection knowledge and skills. This multidimen- ability subgroup would be similar to the customer informa-
sional variable was entered in the third step. The changes in tion system and database management group at a modern
R2 and the F-statistic associated with this step then were ex- financial services company. This group’s responsibilities
amined as a test of H5. would include collecting and storing information related to
As with H1, the effect of the marketing function’s cus- customer profitability and the effect of the firm’s product
tomer connection knowledge and skills was found to explain and service delivery initiatives on that profitability. The cur-
a significant level of variance in perceived firm performance rent attention to “data mining” to determine profitable cus-
beyond the variance explained by an organizationwide mar- tomer initiatives is typical of the activities appropriate for
ket orientation for all six models, in support of H5 (see Table this subgroup.
5). An examination of Tables 3 and 5 also suggests that the Another organizational approach that is less a formal
marketing function customer connections contribute more to structure and more a reflection of information flows is what
firm performance than the more general construct of the val- Day (1997, p. 91) refers to as the establishment of a central
ue of the marketing function. guidance marketing function that would facilitate the “artic-
Marketing function’s .281* (.057) .359* (.147) .131 (.161) –.076 (.180) .404* (.136) .450* (.127) .293*** (.150)
customer–product
connection knowledge
Marketing function’s .193* (.060) .155 (.161) .386** (.175) .338 (.243) .259*** (.131) .156 (.120) .279 (.172)
customer–financial
accountability connection
knowledge and skills
Marketing function’s .042 (.024) .112 (.138) –.076 (.125) .163 (.139) –.054 (.122) –.007 (.106) –.037 (.121)
customer–service quality
connection knowledge
and skills
Service nature of the firma –.066*** (.037) –.056 (.111) –.153 (.136) .238 (.184) .098 (.084) –.172** (.081) –.092 (.122)
Marketing function’s .044*** (.023) .029 (.066) –.023 (.084) .001 (.107) .062 (.063) .085 (.064) .062 (.070)
customer–service quality
connection knowledge and
skills × service
Jaworski and Kohli Narver and Slater Jaworski and Kohli Narver and Slater Jaworski and Kohli Narver and Slater
Whether firm is in a
consumer industry .173 (.234) .133 (.221) .002 (.237) .027 (.234) –.200 (.261) –.287 (.263)
Stage in product
life cycle –.179 (.068)* –.174 (.062)* –.149 (.068)** –.138 (.066)** –.194 (.077)** –.206 (.076)*
Firm size .066 (.069) –.009 (.062) .030 (.070) .007 (.066) .058 (.077) .044 (.073)
Market orientation 1a –.149 (.212) .492 (.117)* –.130 (.215) .141 (.124) .131 (.228) .426 (.141)*
Market orientation 2b .022 (.171) .007 (.111) –.260 (.173) .135 (.118) –.253 (.184) .007 (.129)
Market orientation 3c .529 (.225)** –.008 (.085) .546 (.227)** –.178 (.090) .665 (.242)* .014 (.098)
Marketing function’s
customer connection
knowledge and skills .062 (.030)** .058 (.028)** .114 (.031)* .113 (.030)* .114 (.033)* .118 (.033)*
Degrees of freedom 7,111 7,109 7,111 7,109 7,108 7,106
F-statistic 3.073 (p = .005) 5.618 (p = .000) 3.350 (p = .003) 3.550 (p = .002) 5.034 (p = .000) 5.319 (p = .000)
Adjusted R2 .116 .229 .129 .141 .207 .222
aIn Jaworski and Kohli (1993), the first dimension is market information acquisition, and in Narver and Slater (1990), it is customer orientation.
bIn Jaworski and Kohli, the second dimension is market information dissemination, and in Narver and Slater, it is cross-functional information sharing.
cIn Jaworski and Kohli, the third dimension is market responsiveness, and in Narver and Slater, it is competitor orientation.
dStandardized coefficients are used throughout.
ese refers to the standard error of the estimated coefficients.
*p < .01.
**p < .05.
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