Topics: Marketing, Strategic management, Strategic business unit Pages: 2 (334 words) Published: February 12, 2013
he basic premise of the marketing concept is that its adoption will improve business performance. Marketing is not an abstract concept: its acid test is the eff ect that its use has on key corporate indices such as profitability and market share. Fortunately, in recent years, two quantitative studies in both Europe and North America have sought to examine the relationship between marketing and performance. Th e results suggest that the relationship is positive. We will now examine each of the studies in turn.

Marketing characteristics and business performance
In a study of 1700 senior marketing executives, Hooley and Lynch reported the marketing characteristics of high- versus low-performing companies.
Th e approach that they adopted
was to isolate the top 10 per cent of companies (based on such measures as profit margin, return on investment and market share) and to compare their marketing practices with the remainder of the sample. Th e ‘high fliers’ diff ered from the ‘also-rans’ as follows: • more committed to marketing research

• more likely to be found in new, emerging or growth markets • adopted a more proactive approach to marketing planning • more likely to use strategic planning tools
• placed more emphasis on product performance and design, rather than price, for achieving a competitive advantage
• worked more closely with the finance department
• placed greater emphasis on market share as a method of evaluating marketing performance. Marketing orientation and business performance
Narver and Slater studied the relationship between marketing orientation and business performance.
Marketing orientation was based on three measures: customer orientation, competitor orientation, and degree of inter-functional coordination. Th ey collected data from 113 strategic business units (SBUs) of a major US corporation. Th e businesses comprised 36 commodity businesses (forestry products) and 77 noncommodity businesses...
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