1-s2.0-S0148296397002324-main

Assessing Relationships among Strategic Types,Distinctive Marketing Competencies,and Organizational PerformanceArch G. WoodsideTULANE UNIVERSITY

Daniel P. SullivanTULANE UNIVERSITY

Randolph J. Trappey IIITULANE UNIVERSITY

The multi-item scale developed by Conant, Mokwa, and Varadarajan Conant, Mokwa, and Varadarajan (1990, p. 377) point outthat a large number of studies examining the relationships(1990) for assessing Miles and Snows (1978) strategic typology is appliedbetween strategic types and performance suggest that organi-in a multi-industry, cross-sectional study of 93 Finnish enterprises. Tozational performance will be (1) equal in defender, prospector,replicate and extend the findings of previous reports, three principaland analyzer organizations; and (2) higher than in reactorhypotheses are examined: (1) prospector, analyzer, and defender strategicorganizations.types more often exhibit higher levels of distinctive marketing competencies

In their own empirical study of 83 health maintenancethan reactors; (2) distinctive marketing competencies are associated posi-organizations (14 defenders, 36 prospectors, 29 analyzers,tively and strongly with organizational performance; (3) a weak associa-and 4 reactors), Conant et al. (1990) support this hypothesis.tion exists among the strategic types and organizational performance.However, the small reported F-value and significance levelThe results support al three hypotheses. The importance of distinctive(F 5 2.92, p 5 .04) and small number of reactors includedmarketing competencies in serving as intervening variables between strate-in their test indicate a weak association between strategic typesgic types and organizational performance is illustrated. J BUSN RES 1999.and organizational performance. A change in the organiza-45.135146. 1999 Elsevier Science Inc. All rights reserved.tional performance score of one reactor respondent wouldlikely eliminate support for the hypothesis and the conclusionimplied that strategic types are associated with organizationalperformance.The strategic orientation toward product-markets of Reviewing other studies (e.g., Snow and Hambrick, 1983;most organizations can be categorized as fitting one of Smith, Guthrie, and Chen, 1986) that examined all four strate-a limited number of strategic types. Both of two well-gic types of Miles and Snow (1978) leads to the same conclu-known strategic typologies (Miles and Snow, 1978; Porter,sion: very little of the variance in organizational performance1980) include descriptions of four archetypes. Miles and Snowis explained by the proposed four strategic types.(1978) proposed that the first three of the following four strate-

Two explanations can be offered for the lack of a substantivegic types enjoy similar degrees of success, whereas the last is aassociation between strategic types and organizational perfor-strategic failure: prospectors, analyzers, defenders, and reactors.

Porter (1980) proposed that three potentially successful genericcompetitive strategies can occur in any industry: overall cost

1 Using ratings of 25 MBA students, Segev (1989) provides a useful synthesisleadership, differentiation, and focus. Porter also described a

of these two typologies along the lines of two principal dimensions of 31low performing strategy: stuck-in-the-middle.1 strategic variables: internal consistency and proactiveness. The six successful

archetypes were found to have high and almost identical rates of internalFocusing on the Miles and Snow (1978) strategic typology,consistency, whereas the reactor and stuck-in-the-middle firms rate very lowon internal consistency. On the proactiveness dimension, the following orderwas found by Segev: prospector . differentiation . analyzer . overall costAddress correspondence to Arch G. Woodside, A. B. Freeman School of

Business, Tulane University, New Orleans, LA 70118. leadership 5 focus . defender.

Journal of Business Research 45, 135146 (1999) 1999 Elsevier Science Inc. All rights reserved. ISSN 0148-2963/99/$see front matter655 Avenue of the Americas, New York, NY 10010 PII S0148-2963(97)00232-4

136 J Busn Res A. G. Woodside et al.1999:45:135146

mance. First, strategic type refers to the problem and solution self-typing (the most widely operationalization), objective in-sets (Miles and Snow, 1978) the organization is focused on; dicators, external assessment, and investigator inference (cf.the four strategic types proposed by Miles and Snow are Snow and Hambrick, 1980). Conant et al. (1990) reportednot intended to reflect how well organizations perform but, one of the few empirical studies to use multiple approachesinstead, how organizations perceive what they have to do. (two self-typing scales) in the same study.

Second, the effectiveness of a particular strategic orientation Conant et al. (1990) developed and provided a multi-is likely to be contingent upon the dynamic market conditions item scale for operationalizing the Miles and Snow strategicfacing the enterprise; a view that receives modest empirical typology appears to provide acceptable levels of validity (100%support in a study by McKee, Varadarajan, and Pride (1989). concurrence on content validity by a panel of judges) andSo many factors (including luck and competitor misfortune) reliability (average test-retest reliability coefficient 5 0.69). Ancan affect organizational performance, in a particular year or additional aim of the present study is to offer an independentshort span of years (cf. Kotler, 1991, p. 230), that a focus on assessment of this scale.the direct links between strategic types and organizational The Conant et al. (1990) scale includes 11 items coveringperformance may be of little value. all 11 principal dimensions they explicated from the Miles and

The research report by Conant et al. (1990) is noteworthy Snow typology.2 Four distinct response options are provided fortheoretically, and particularly useful for strategists, in the rela-

each question. Each response option characterizes a distinctivetionships they find among strategy types and distinctive mar-

archetype relative to one of the principal dimensions. Conantketing competencies. Their findings include significant F-val-

et al. (1990, p. 372) emphasized that such a self-reportingues for 14 of 20 distinctive marketing competencies. Theapproach has been acknowledged as an appropriate method tostrategic types were found to be arrayed ordinally in termsuse when conducting strategy research (cf. Snow and Hambrick,of their relative degree of marketing related competencies:1980; Harrigan, 1983; Huber and Power, 1985) and has beenprospector . analyzer . defender . reactor.utilized frequently in strategy research (cf. Dess and Davis,Given that distinctive marketing competencies are associ-1984; Smith et al., 1986; Snow and Hrebiniak, 1980).ated substantially with organizational performance (an hy-

Several research method experts have emphasized the needpothesis not examined by Conant et al., 1990), such compe-to avoid single-item scales and to develop valid and reliabletencies may serve to link strategic types and organizationalmulti-item scales (Nunnally, 1978; Peter, 1979). Most con-performance. Because distinctive marketing competencies re-structs by definition are too complex to be measured effectivelyfer to an organizations unique abilities to gain knowledgewith a single item, and multi-item scales are necessary for appro-about customers and provide benefits sought by customers,priate reliability and validity assessment (Peter, 1979, p. 16).such abilities should be associated directly with the organiza-Thus, if the validity and reliability estimates are verified indepen-tions performance relative to competitors (along with luckdently, the new scale would offer significant managerial andand environmental factors).

Thus, a strong two-step relationship may be proposed and research potential as claimed by Conant et al. (1990, p. 365).tested: the four strategic types being linked with distinctive In applying their scale, Conant et al. (1990) used a majority-marketing competencies and such competencies linked with rule decision structure: organizations were classified as de-organizational performance. We report a multi-industry, cross- fenders, prospectors, analyzers, or reactors depending on thesectional, field study to examine this proposal. The results con- archetypal response option that was selected most often. Tiesfirm a consistent pattern of relationships linking strategic types involving reactor response options resulted in the organizationto distinctive marketing competencies, and these competencies being categorized as a reactor; ties not involving the reactorto organizational performance; strategic types are found not to response options resulted in the organization being classifiedbe associated directly with organizational performance. as an analyzer. Thus, each firm (n 5 148) providing complete

The remainder of the article is organized as follows. A brief responses to the multi-item scale was classified into one ofreview of validity and reliability issues in methods to assess the four archetypes. Conant et al. (1990) also used an adapta-the Miles and Snow strategic typology is presented. Second, tion (to reflect HMOs) of Snow and Hrebiniaks (1980) para-three hypotheses are presented. Third, the research method graph approach in the same study. The overall degree ofis described. Fourth, the findings are presented and evaluated.

convergence achieved between the two scales was 56%.Finally, implications for research and management are offered

Conant et al. (1990) decided to narrow their data set toin the discussion section.

relatively pure (cf. Hambrick, 1982, p. 162) strategic arche-types by including only organizations identified in the same

Assessing the Validity andReliability of Operations of

2 Other multi-item scales (cf. Smith, Guthrie, and Chen, 1986; Segev, 1987)may not be as comprehensive in estimating the 11 strategic dimensions inMiles and Snows Strategic TypesMiles and Snow typology as Conant et al.s (1990) newer scale. The objectives

Four empirical methods have been used for assigning organi- of the study reported here did not include an examination of the relativevalidities and reliabilities of these multi-item scales.zations into one of the four Miles and Snow strategy types:

137Assessing Strategic Types J Busn Res1999:45:135146

Figure 1. Hypothesized relationships among strategic types, distinctive marketing competencies, and organizational performance.

archetype by both scales. Thus, their analyses are based on Whereas luck and many other factors may affect organiza-tional performance (Kotler, 1991, p. 230), a substantial bodythe responses of 83 organizations: 36 prospectors, 29 ana-of empirical evidence supports the view that organizations thatlyzers, 14 defenders, and four reactors.are able to demonstrate distinctive marketing competenciesFew organizations may be oriented strategically toward oneoutperform their competitors (e.g., Clifford and Cavanagh,archetype across most or all 11 distinctive strategic dimen-1985; Saunders and Wong, 1985; Buzzell and Gale, 1987;sions. Some elements of all four strategic types may be exhib-Baker and Hart, 1989).ited by the same organization to such an extent that it may

not be possible to identify the organizations strategic orienta- H3: The four strategic types are hypothesized to be associ-tion as fitting one archetype. One reason why such an ambigu- ated weakly with organizational performance.ous, or mixed, strategic type occurs is provided by Mintzberg

Rationales for this hypothesis includes Miles and Snows(1988, p. 55). Organizations add a good deal of strategic(1978) proposition that, because of their consistent responsebaggage over time, just as individuals do in their private lives;to environmental dynamics, prospectors, analyzers, and de-periodic housecleaning is often in order for both.fenders are equally likely to perform well. The performanceMiles and Snow (1978) described analyzers as hybridof reactors is below these three archetypes because they fallorganizations that possess both defender and prospector char-into an unpleasant cycle of responding inappropriately toacteristics. Classifying such organizations distinctly as ana-environmental changes.lyzers may be especially difficult.

Also, strong relationships have not been reported empiri-Thus, a useful approach may be to not require all organiza-cally between the Miles and Snow strategic types and organiza-tions to be identified as fitting one archetype when using thetional performance (cf. Snow and Hrebiniak, 1980; Hambrick,Conant et al. (1990) scale. Some organizations may be best

identified as representing an ambiguous strategic type. BothTable 1. Sign Test Results for Twenty Distinctive Marketing Compe-approaches to classifying organizations were evaluated in thetencies for Pure Strategic Types in Two Studiespresent study.

Conant, Mokwa, and PresentVaradarajan (1990) Study

Comparison Results (p) Results (p)HypothesesThree hypotheses were formulated for examination. These P . A 15 (0.02) 15 (0.02)

A . P 4 4hypotheses are summarized in Figure 1.P 5 A 1 1

H1: The following order of superiority/inferiority on evalu- P . D 17 (0.001) 20 (0.001)ations of distinctive marketing competencies is found: D . P 3 0

P 5 D 0 0prospectors . analyzers . defenders . reactors.P . R 19 (0.001) 20 (0.001)

Rationales for this hypothesis include several theoretical R . P 1 0propositions by Miles and Snow, for example, the prospec- P 5 R 0 0

A . D 14 (0.06) 18 (0.001)tors prime capability is that of finding and exploiting newD . A 6 2product and market opportunities (1978, p. 55). Also, theA 5 D 0 0hypothesized rank order is found to be significant statisticallyA . R 20 (0.001) 19 (0.001)

in a sign test (Siegel, 1956) of Conant et al.s (1990) findings. R . A 0 1The results of this test are reported in Table 1 of the present A 5 R 0 0

D . R 17 (0.001) 18 (0.001)article.R . D 3 1

H2: Evaluations of distinctive marketing competencies are D 5 R 0 1associated positively with organizational performance.


1983; Smith et al., 1986; Conant et al., 1990). Conant et al. This third item was included to examine the influence of(1990, p. 377) found a significant relationship (F 5 2.92; strategic archetypes and distinctive marketing competenciesp 5 0.04) but do not report the strength of this relationship. on a nonmonetary organizational performance variable. UsingHowever, with an F equal to 2.92, and 3 and 79 degrees of data from the profit impact of marketing strategy data, provid-freedom, the strength of the relationship between strategic ing superior service and quality to customers, and therefore,types and organizational performance in the Conant et al. higher customer satisfaction relative to competitors, has been(1990) can be estimated using omega-squared (Hays, 1973). identified as the most important distinctive marketing compe-The results of such an analysis on the Conant et al. (1990) tence (Buzzell and Gale, 1987; p. 7). Thus, a strong-relation-findings indicates that 6.2% of the variance in organizational ship among some distinctive marketing competencies and theperformance is accounted for by strategic types. third organizational performance measure, customer satisfac-

Defining relationships accounting for less than 10% of tion, was expected.variance estimates to be weak, 10 to 20% to be moderate, and Conant et al. (1990) noted that managerial self-reports ofover 20% to be strong, we conclude a weak direct relationship organizational performance have been found to be consistentbetween strategic types and organizational performance may with objective performance measures internal to the organiza-exist. The three hypotheses serves to propose a strong two- tion (Dess and Robinson, 1984), as well as secondary pub-step relationship that links strategic types to organizational lished performance data external to the organization (Venka-performance via distinctive marketing competencies. traman and Ramanujam, 1986).

Organizational and personal demographic questions wereResearch Method also included in the survey form. To ensure that the respon-

dents possessed an adequate knowledge and awareness of theThe study reported is a multi-industry, cross-sectional, conve-relationship between their organization and its environment,nience sample of single informants (n 5 119) completingthe two screening questions were used. Respondents (n 5self-reports on the tree principal sets of operationalizations:14) reporting little direct knowledge of their organizationsstrategic types, distinctive marketing competencies, and orga-strategies and who possessed low levels of confidence in theirnizational performance. The respondents were postgraduateability to evaluate the manner in which their organizationsstudents enrolled in the Helsinki School of Economics Execu-develop strategy were excluded from the data analyses.tive M.B.A. program during 1990 and 1991. All respondents

were fluent in the English language. Most of the respondentswere middle and senior managers, ranging in age form 27 to Classification Procedures58 years. The survey forms were distributed during the first For the responses to the nominal scale level, Conant et al.class meeting of the marketing management course for com- (1990) multi-item, instrument for assessing strategic types,pletion and the forms were returned the following day. two decision-rules were used to categorize each organization

into an archetype. First, a weak plurality rule was applied:Instruments

organizations were classified as prospectors, analyzers, de-The Conant et al. (1990) multi-item scale of the Miles and fenders, or reactors, depending on the archetypal responseSnow strategic archetypes was adapted for the purpose of the option that was selected more often than any other archetypalstudy. To generalize the applicability of the scale, HMO response option. For example, if a respondent selected fourwas replaced with organization in the items in the scale. prospector response options and three or less archetypal re-Responses to the Snow and Hrebiniaks (1980) paragraph

sponse options for the other seven items, the organizationdescriptions were also collected.

would be categorized as a prospector. Ties were handled byThe 20-item distinctive marketing competencies scale de-

creating an ambiguous category based on the rationale thatveloped by Conant et al. (1990) was completed by the respon-

some organizations display no dominant enduring patterndents. The scale requires respondents to evaluate how well orof strategic behavior, and that applying additional rules forpoorly they perceive their organizations performs relative toassigning ties to the Miles and Snow archetypes reduces thetheir competitors. Seven-point responses are available for eachability to gain information from the data.scale item ranging from 1 5 much worse to 7 5 much better.

Second, a strong plurality rule was applied: the responsesFor reporting organizational performance, a three-itemfor a given strategic archetype selected most often had toscale was used. The first two items represented the completeinclude two or more responses compared to the strategicscale developed and used by Conant et al. (1990) to assessarchetype selected in second place. For example, a respondentorganizational performance: the respondents evaluated theirselecting five defender archetype responses, three prospector,organizations general profitability relative to their competitorstwo analyzer, and one reactor responses, would be workingand their organizations relative return on investment. Thein an organization categorized as a defender. For data analysesthird item asked respondents to evaluate the overall level ofused with this strong plurality rule, ties were eliminated tosatisfaction with using the products and services your organi-test the hypotheses using relatively pure (Hambrick, 1982,zation provides to its customers compared to other organiza-

tions in the same industry as your own organization. p. 162) archetypes.


comparisons were significant differences found among pros-Resultspector, analyzer, reactor, and ambiguous organizations (details

A total of 93 completed survey forms were collected. Infor- not included in Table 2A).mants averaged 14 years of experience in their current organi- In Table 2B, the ANOVA F-statistic is significant for 12 ofzations. The organizations represented in the responses were the 20 distinctive marketing competencies. Pairwise compari-from industrial manufacturing (31%), banking (22%), export sons via Tukey tests for these 12 dimensions indicate thatservices (13%), retailing (9%), distribution and other organi- the factors always average below one or more of the otherzations (25%). A total of 22% held the position of chief op- archetypes and none of the comparison among prospectors,

analyzers, and defenders being significant (details not includederating office or managing director, senior/executive vice presi-in Table 2B).dent was the job title of 13%, other positions receiving 5%

Sign test results for the 20 distinctive marketing competen-or more responses included marketing manager, product man-cies are summarized in Table 1. Sign test results for the findingsager, controller, and administrative director. Their organiza-from Conant et al.s (1990) study as well as the present studytions averaged 250 employees.are very similar; a strong pattern supporting H1 is found inboth studies.Sample Composition by Strategic Types However, the findings reported in Table 1 may be some-

The use of the paragraph approach resulted in a distribution what misleading in assuming that 20 distinctive competenciesof 27 prospectors, 31 analyzers, 21 defenders, and 14 reactors. actually are distinct from one another. Psychometric examina-The use of the weak plurality rule resulted in a distribution tion of the Conant et al. (1990) scale for distinctive marketingof 21 prospectors, 19 analyzers, 31 defenders, 15 reactors, competencies may indicate that several of the 20 items tapand seven ambiguous organizations. The use of the strong the same dimensions. Thus, we digress to examine this issue.plurality rule resulted in 15 prospectors, 15 analyzers, 25defenders, and 11 reactors. Psychometric Examination of the Conant et al.

The use of both the paragraph measure and the multi-item (1990) Distinctive Marketing Competency Scalemeasure with the strong plurality rule resulted in only a 32%

The findings from an orthogonally rotated factor analysis (Ker-sample convergence. The relatively pure archetypes resulting

linger, 1973) of the total sample responses (n 5 93) arefrom the convergence included six prospectors, four analyzers,

reported in Table 3. Factor loadings greater than 0.50 arefive defenders, and six reactors. Given these results, the high reported in Table 3. Five factors are found with eigenvaluestest-retest convergence results for the multi-item scale re- greater than 1.0; 68.5% of the total response variance is ex-ported by Conant et al. (1990) and because the multi-item plained with this five-factor solution.scale reflects all 11 dimensions underlying the theoretical As displayed in Table 3, seven items load heavily on theconstruct, we decided to restrict the analyses to the classifica- first factor. We assigned the label, skills to this factor. Thistion of organizations by the weak and strong plurality rules. first factor explained close to 40% of the total response vari-

ance and, as such, appears to be the dominant marketingcompetency factor.H1: Strategic Types and Distinctive

Based on the three items included, image was name as-Marketing Competenciessigned to the second factor. The advertising effectiveness item

When applying the strong plurality rule, the findings provideloaded on both of the first two factors but in subsequent

strong support the first hypothesis. The following superiorityanalysis this item was included among the other items loading

pattern is found for the distinctive marketing competencies: on the first factor.prospector . analyzer . defender . reactor. The pattern found Service was the name assigned to the third factor. Thisusing the weak plurality rule is similar but not as definitive. factor includes four items as displayed in Table 3. KnowledgeDetailed results appear in Table 1, Table 2A and Table 2B. identifies the fourth factor; the three items included all make

The relationships among distinctive marketing competen- reference to the organizations level of knowledge. Fundscies and strategic types were examined using analysis of vari- identifies the fifth factor; the three items included concernance (ANOVA) for the organizations. For organizations classi- refer to costs, revenues, and pricing.fied using the weak plurality rule, the findings appear in Table For estimating correlations among the factors, total factor2A. For organizations classified using the strong plurality rule, scores were calculated by weighting the item responses forthe findings appear in Table 2B. each factor by their factor scores and summing. Also total

In Table 2A, the ANOVA F-statistic is significant (p , factor scores were calculated using the summed raw scores0.05) for 11 of the 20 distinctive marketing competencies. for each factor. The correlation findings from both approachesPairwise comparisons for these 11 dimensions via a Tukey were very similar; the reported results and further analysestest (p , 0.05; cf. Banks, 1965) result in the reactors averages are based on the summed factor scores.always being significantly lower than one or more of the Cronbach alphas (Nunnally, 1978) and correlations be-

tween the factors are reported in Table 4. For the first fourother Miles and Snow strategic archetypes; in none of the


Table 2A. Results of Analysis of Variance: Strategic Types and Distinctive Marketing Competencies

Strategic Types

Prospector Analyzer Defender Reactor Ambiguous TotalDistinctive Marketing (P) (A) (D) (R) (M) Sample UnivariateCompetency n 5 21 n 5 19 n 5 31 n 5 15 n 5 7 n 5 93 F-value (p)

1. Knowledge of customers 5.6 5.1 5.0 4.2 4.4 5.0 3.56 (0.01)2. Knowledge of competitors 5.0 4.9 4.7 4.0 4.1 4.6 1.50 (0.21)3. Knowledge of industry trends 5.4 5.6 5.2 4.1 4.9 5.1 5.09 (0.001)4. Accuracy of profitability and

revenue forecasting 5.1 4.8 4.5 4.1 5.0 4.7 1.58 (0.19)5. Awareness of organizational

marketing strengths 5.0 4.9 4.8 3.3 4.3 4.6 5.00 (0.001)6. Awareness of organizational

marketing weaknesses 4.4 4.1 4.1 3.2 4.0 4.0 2.37 (0.06)7. Marketing planning process 4.6 4.7 3.9 3.3 3.6 4.1 3.51 (0.01)8. Allocation of marketing

department resources 4.2 4.3 3.9 2.9 3.9 3.9 2.43 (0.05)9. Integration of marketing

activities 4.2 4.1 4.2 2.9 4.4 4.0 2.45 (0.05)10. Skill to segment and

target markets 5.0 4.8 4.6 3.9 4.0 4.6 1.53 (0.20)11. Ability to differentiate

service offerings 5.3 5.1 4.7 4.1 4.9 4.8 1.98 (0.10)12. New service development

process 5.0 5.3 4.7 3.6 5.0 4.7 2.61 (0.04)13. Quality of service and

offerings 5.8 5.8 5.5 4.6 5.6 5.5 3.34 (0.01)14. Effectiveness of pricing

program(s) 4.8 4.8 4.7 4.7 4.0 4.7 0.62 (0.65)15. Advertising effectiveness 5.0 4.7 3.7 3.2 4.1 4.2 5.19 (0.001)16. Effectiveness of public

relations 4.9 4.6 4.2 3.6 4.9 4.4 1.74 (0.15)17. Image 5.4 5.9 4.8 4.0 5.0 5.1 4.57 (0.002)18. Locations of facilities 5.3 5.0 4.7 3.9 4.7 4.8 2.03 (0.10)19. Effectiveness of cost

containment 4.6 4.3 4.5 4.5 4.6 4.5 0.10 (0.98)20. Control and evaluation of

marketing activities 4.0 4.4 4.1 2.7 4.1 3.9 4.70 (0.002)

factors, the alpha coefficients are close to, or above, the 0.70 Additional Test of Strategic Types andlevel recommended by Nunnally (1978) for measurement in- Distinctive Marketing Competenciesstruments in their developmental stages.

For the weak plurality data classification, the ANOVA resultsGiven the exploratory nature of examining the underlyingfor testing H1 using summed item scores for each factor arefactor structure of the marketing competency scale and thesummarized in Table 5. Weak to moderate strength relation-significantly higher alpha correlation found for the fifth factorships are found for the first four factors and the five strategiccompared to its correlations with the other four factors (p ,types. The ANOVA findings for the strong plurality data classi-0.05), the three items included in the fifth factor in Table 3fication (not shown) are very similar to the results reportedwere included in estimating this factor for examining thein Table 5.hypotheses.

The organizations classified as rejectors are found to haveAll correlations reported in Table 4 are significant (p ,significantly lower marketing competencies compared to pros-0.01) with the exception of the correlation between knowledgepectors for the first four factors. Rejectors average lower mar-and funds (r 5 0.15) indicating that moderate to strong rela-keting competencies for three of the first four factors comparedtionships exist among the five factors. We conclude that fivewith analyzers. Rejectors average lower marketing competen-unique, but related, marketing competency factors are foundcies for the service and knowledge factors compared within the Conant et al. (1990) marketing competency scale. Re-defenders. None of the paired comparisons involving the orga-search findings from additional studies are needed for con-

firming this conclusion. nizations classified in the ambiguous category was significant.


Table 2B. Results of Analysis for Pure Strategic Types

Strategic Types

Prospector Analyzer Defender Reactor TotalDistinctive Marketing (P) (A) (D) (R) Sample UnivariateCompetency n 5 15 n 5 15 n 5 26 n 5 11 n 5 67 F-value (p)

1. Knowledge of customers 5.6 5.1 4.8 4.4 5.0 2.46 (0.07)2. Knowledge of competitors 5.2 4.8 4.6 3.9 4.7 1.73 (0.17)3. Knowledge of industry trends 5.5 5.5 5.1 3.9 5.1 4.99 (0.00)4. Accuracy of profitability and

revenue forecasting 4.9 4.8 4.4 3.8 4.5 1.63 (0.19)5. Awareness of organizational

marketing strengths 5.0 4.9 4.7 3.2 4.6 5.88 (0.00)6. Awareness of organizational

marketing weaknesses 4.4 4.2 3.8 3.2 3.9 2.72 (0.05)7. Marketing planning process 4.9 4.7 3.8 3.3 4.1 4.80 (0.00)8. Allocation of marketing

department resources 4.5 4.3 3.7 3.0 3.9 2.44 (0.07)9. Integration of marketing

activities 4.5 4.1 4.0 3.1 4.0 1.79 (0.16)10. Skill to segment and target

markets 5.1 4.8 4.2 3.6 4.4 2.99 (0.04)11. Ability to differentiate

service offerings 5.3 5.1 4.3 3.9 4.7 3.35 (0.02)12. New service development

process 5.1 5.3 4.5 3.7 4.7 2.90 (0.04)13. Quality of service and

offerings 5.9 5.7 5.3 4.5 5.4 3.57 (0.02)14. Effectiveness of pricing

program(s) 4.8 4.9 4.7 4.5 4.7 0.31 (0.82)15. Advertising effectiveness 4.9 4.7 3.6 3.4 4.1 4.35 (0.01)16. Effectiveness of public

relations 4.7 4.6 4.2 3.3 4.3 2.01 (0.12)17. Image 5.5 6.0 4.7 3.9 5.1 3.20 (0.03)18. Locations of facilities 5.3 4.6 4.7 3.5 4.6 3.05 (0.04)19. Effectiveness of cost

containment 4.5 4.2 4.4 4.4 4.4 0.57 (0.97)20. Control and evaluation of

marketing activities 4.1 4.2 3.9 2.9 3.9 2.69 (0.05)

Although not significant statistically, the average values for and ROI are very similarly associated with the five marketingthe first four factors are higher for prospectors and analyzers competencies, whereas customer satisfaction is associated dif-compared with defenders. The profiles for prospectors and ferently across the five marketing competencies. Given thatanalyzers are very similar for the average values across the profit and ROI are monetary measures of performance, thefive factors. Thus, these findings provide additional support to findings that the highest correlations of these two performancethe conclusion that prospectors and analyzers exhibit slightly measures occur with the only monetary related marketinghigher levels of marketing competencies compared with de- competency factor, the fifth factor, funds, meets a priori expec-fenders, and all three exhibit substantially higher marketing tations that effective cost containment, accuracy of profit andcompetencies for two or more marketing competency factors. revenue forecasting, and effective pricing programs are associ-

ated with higher profits. Although significant, the correlationH2: Distinctive Marketing Competencies of funds and customer satisfaction is substantially lower (r 5and Organizational Performance 0.29) compared with the correlations of funds and profit and

ROI (differences significant at p , 0.01). Such an expectedPearson product-moment correlations among the factor scoresand achieved discrimination pattern of relationships indicatesand the three measures of organizational performance supportsubstantial nomological validity (Peter, 1981) for the proposi-the second hypothesis: distinctive marketing competencies aretion that different marketing competency factors strongly af-associated strongly with organizational performance. Detailsfect different organizational performance variables.appear in Table 6.

The patterns of correlations in Table 6 indicate that profit In examining the correlations in Table 6, the marketing


Table 3. Rotated Factor Matrix of Distinctive Marketing Competencies

Factor

Scale Number and Question Skills Image Service Knowledge Funds

7. Marketing planning process 838. Allocation of marketing

department resources 839. Integration of marketing

activities 7920. Control and evaluation of

marketing activities 6715. Advertising effectiveness 59 54

6. Awareness of organizationalmarketing weaknesses 57

10. Skill to segment and targetmarkets 55

16. Effectiveness of public relations 7917. Image 7718. Locations of facilities 7212. New service development

process 8411. Ability to differentiate

service offering 725. Awareness of organizational

marketing strengths 6113. Quality of services and offerings 54

2. Knowledge of other organizations 871. Knowledge of customers 603. Knowledge of industry trends 60

19. Effectiveness of cost containment 804. Accuracy of profitability and

revenue forecasting 7014. Effectiveness of pricing programs 50

Percent of variance 39.6 8.6 7.7 6.4 6.2Cumulative percent 39.6 48.2 55.9 62.4 68.5

Note: Decimals omitted for factor scores.

competency factor of service appears to be a linking factor compared with these two models, a unique relationship isfound between the marketing competency factors and cus-among the five marketing competencies and the three mea-tomer satisfaction.sures of organizational performance. The service factor reflects

Thus, designing and offering superior service to customersthe organizations skill in delivering distinct and superior ben-may be a necessary, but not sufficient, marketing competencyefits to customers. Not achieving this skill may lead to bothfor achieving both high profits-ROI and customer satisfaction.inferior levels of customer satisfaction and poor financial per-Developing a keen skill related to managing organizationalformance.costs, revenue forecasting, and prices (the funds factor) mayStepwise multiple regression findings of the influence of

the marketing competency factors on the three measures oforganizational performance indicate that the service factor

Table 4. Correlations (and Coefficient Alphas) for Five Distinctiveis the only marketing competency factor to make a uniqueMarketing Competency Variables (n 5 93)contribution to explained variance for all three performance

measures. Results are summarized in Table 7. VariablesFunds and service are the two marketing competency fac- Variable Skills Image Service Knowledge Funds

tors that alone explain 39 and 30% of the variance in ROISkills (0.90) 0.51 0.64 0.54 0.38and profit, respectively. Service and image, followed by knowl-Image (0.67) 0.46 0.42 0.32edge, are the three marketing competency factors that explainService (0.83) 0.49 0.4130% of the variance in customer satisfaction. The empiricalKnowledge (0.71) 0.15

models in Table 7 indicate that very similar relationships Funds (0.59)between the marketing competence factors and ROI and profit;


Table 5. Strategic Types and Distinctive Marketing Competencies

Strategic Types TotalDistinctive Marketing P A D R M Sample UnivariateCompetency n 5 21 n 5 19 n 5 31 n 5 15 n 5 7 n 5 93 F-value x2

Skills 32 31 28 22 28 29 4.38 0.12(p , 0.003)

Image 36 35 31 27 34 33 2.56 0.06(p , 0.04)

Service 21 21 20 16 20 20 4.50 0.13(p , 0.002)

Knowledge 16 16 15 12 13 15 4.80 0.14(p , 0.001)

Funds 15 14 14 13 14 14 0.58 0.00(p , 0.68)

Key: P 5 prospector; A 5 analyzer; D 5 defender; R 5 reactor; M 5 ambiguous.Tukey test results (p , 0.05): Marketing skills: P, A . R; Service quality: P, A, D . R; Marketing knowledge: P, A, D . R; Image: P . R; Allocating funds: NS.

be a priority marketing competency for achieving high profits and funds factors. The scale items in the skills factor all refer tothe organizationss ability at doing internal marketing activitiesand ROI. Effective organizational image management and deepexceptionally well; most scale items in the other four market-knowledge of customers, competitors, and industry trendsing competency factors refer to doing external marketing activ-appear necessary in particular for achieving high customerities exceptionally well.satisfaction.

Note that the dominant factor in explained variance amongthe marketing competency items, skills, did not enter into the Strategic Types and Organizational Performancestepwise regression models in Table 7. The skills factor is The findings support H3: the four strategic types are associatedassociated strongly with the other four marketing competency weakly with organization performance. In applying both thefactors, especially service (r 5 0.64), and two or more of these weak and strong plurality rules for classifying the respondingother four marketing competency factors are associated more organizations, none of the reported ANOVA results are signifi-strongly with the three measures of organizational perfor- cant statistically. The findings from applying the weak pluralitymance (see Table 6). Thus, we speculate for future research rule are presented in Table 8. For the nine comparisons be-that the skills factor serves as a foundation marketing compe- tween prospectors, analyzers,and defenders versus reactors intency on which the other four marketing competency factorsare built.

Table 7. Regression Model Results of Effects of Distinctive Market-For achieving high performance an organization must dis-ing Competency Variables on Organizational Performanceplay superior skills in marketing planning, allocating of mar-

keting department resources, integrating marketing activities, Model b Sb beta t-value p ,and controlling and evaluating marketing activities. Gaining

ROIsuch superior skills may be necessary for achieving superiorFunds 0.25 0.05 0.45 4.84 0.0000marketing competencies for the image, service, knowledge,Service 0.11 0.03 0.29 3.04 0.0031Constant 20.76 0.75 21.01 0.3157

Adjusted R2 5 0.39;Table 6. Correlations of Five Distinctive Marketing Competencies df 5 2/84; p , 0.0000with Organizational Performance Variables Profit

Funds 0.23 0.05 0.45 4.80 0.0000Organizational Performance Service 0.10 0.03 0.28 2.95 0.0041

Distinctive Marketing Customer Constant 20.36 0.72 20.49 0.6246Competency Profit ROI Satisfaction Adjusted R2 5 0.30;

df 5 2/84; p , 0.0000Customer satisfactionSkills 0.27 0.27 0.43a

Image 0.26 0.30 0.51a Service 0.07 0.02 0.32 3.13 0.0024Image 0.03 0.01 0.30 3.03 0.0032Service 0.49 0.48a 0.54a

Knowledge 0.14 NS 0.08 NS 0.46a Knowledge 0.07 0.03 0.20 2.00 0.0488Constant 1.69 0.49 3.45 0.0009Funds 0.57 0.58 0.29

Adjusted R2 5 0.30;df 5 2/84; p , 0.0000a p , 0.001.

Note: All relationships significant (p , .05) except two noted by NS, not significant.


Table 8. Strategic Types and Organizational Performance

Strategic Types TotalOrganizational Performance P A D R M Sample UnivariateMeasure n 5 21 n 5 19 n 5 31 n 5 15 n 5 7 n 5 93 F-value (p)

Profit 5.0 4.9 4.9 4.5 4.7 4.9 0.31 (.87)Return on investment 5.1 4.7 4.7 4.3 4.7 4.8 0.55 (.70)Customer satisfaction 5.6 5.4 5.2 4.7 5.4 5.3 1.58 (.19)

Key: P 5 prospector; A 5 analyzer; D 5 defender; R 5 reactor; M 5 ambiguous.

Table 8, the reactors had lower average performance scores item scale. This first factor, skills, is related significantly to(p , 0.002, sign test); the same findings occurs for the compar- the other four factors. The scales developed representing theisons when the strong plurality rule is applied. Thus, a consis- other four factors indicated that these four specific competencytent, but marginal, direct relationship is found between the factors explain substantial percentages of the variance in thestrategic types and organizational performance. measures of organizational performance (R2 . 0.29).

Based on the findings in the reported study, a revised setof hypotheses for examination in future research is summa-Discussion and Suggestions forrized in Figure 2. This figure is an attempt to illustrate twoFuture Research major propositions. First, we propose that strategic types arerelated mainly to organizational performance through their de-The designed study and reported findings build directly onvelopment and implementation of distinctive marketing com-the work reported by Conant et al. (1990). The central hypoth-

eses and findings of the Conant et al. (1990) study were petencies. Second, different marketing competency factors aresupported and extended in the study reported here. Using a associated with different organizational performance factors.multi-industry convenience sample of Finnish organizations A third point: a primary factor, labeled skills, that includesthe same pattern of relationships are found as in the Conant marketing planning and allocating/controlling of marketinget al. (1990) study of organizations in the HMO industry in department resources, is a foundation marketing competencythe United States: prospectors . analyzers . defenders . dimension. This primary, internal, marketing competency di-reactors across 20 distinctive marketing competencies. A weak mension may be a necessary condition for developing addi-relationship was found in the present study between strategic tional marketing competencies necessary for achieving supe-types and organizational performance. rior organizational performance.

Besides offering a replication of the Conant et al. (1990) Additional research is needed to examine both the existencestudy to a multi-industry organizational sample in a different of reported five dimensions of distinctive marketing compe-country, the contributions of the present study include: testing tencies and how these dimensions relate to strategic types andthe relationship between distinctive marketing competencies organizational performance. Also, both cross-sectional andand organizational performance, estimating the strength of longitudinal studies are needed using multiple-informants tothe relationships between strategic types, distinctive marketing

estimate convergence across two or more individuals in classi-competencies, and organizational performance, as well as of-

fying organizations into strategic types. The use of multiple-fering refinements to Conant et al.s (1990) marketing compe-

informants from the same organization to examine validitytencies scale.

and reliability issues in classifying firms into strategic typesThree moderate-sized relationships are reported betweenis particularly noteworthy; this point has been emphasizedstrategic types and distinctive marketing competencies (Tableby Conant et al. (1990, p. 379).5) that have theoretical and practical importance. Reactor

The limitations of the present study should be emphasized.organizations, in comparison with prospector, analyzer, andThe findings are based on a convenience survey of single-defender organizations, may often develop inferior marketinginformants representing organizations in multiple industries.competencies related to planning and integrating skills, serviceThe participants were students in an Executive M.B.A. pro-offerings to customers, and knowledge about customers andgram in Finland. The motivations and responses of thesecompetitors. Also, the image management ability of reactorsparticipants are likely to be different than that found in otherappears often to be less than the other strategic types.studies. The observations of five principal dimensions of mar-Five major, unique, factors may be present in the Conantketing competencies and the strength of relationships amonget al. (1990) marketing competency scale. The scale items instrategic types, marketing competencies, and organizationalthe first four factors exhibited acceptable overall levels ofperformance may not be found in more representative, lessinternal reliabilities (Table 4). The first factor accounted for

about two-fifths of the total variance in responses to the 20- convenient, multi-industry respondent samples.


Figure 2. Revised hypothesized relationships among strategic types, distinctive marketing competencies, and organizational performance.

fication of relatively pure strategic types may be accomplishedScales for Classifying Organizationsbest by the use of two multi-item scales or by applying stronginto Strategic Typesplurality decision rules in classifying firms into strategic types.

As noted by Conant et al. (1990, p. 379) and Peter (1979, p.As emphasized by Conant et al. (1990), their multi-item scale

16) and earlier in this article, most constructs, including thefor classifying firms by strategic types is new and at the devel-

11 dimensions proposed by Miles and Snow (1978) for theopmental stage; additional work is needed in refining this

four strategic types, by definition are too complex to be mea-scale for research on strategic types.

sured effectively with a single item, and multi-item scales arenecessary for appropriate reliability and validity assessment. ReferencesGiven: (1) these warnings about single items scales and the

Baker, M. J., and Hart, S. J.: Marketing and Competitive Success, P. Allan,value of multi-item scales; (2) the paragraph approach classi- Oxford. 1989.fies firms into strategic types based on only two or three of Banks, S.: Experimentation in Marketing, McGraw-Hill, New York. 1965.the 11 dimensions explicated in Miles and Snows (1978)

Buzzell, R. D., and Gale, B. T.: The PIMS Principles: Linking Strategy toadaptive cycle; and (3) the convergence of less than 50% Performance, The Free Press, New York. 1987.found in the reported study and by Hambrick (1981), and Clifford, D. K. Jr., and Cavanagh, R. E.: The Winning Performers: Howthe convergence of 56% found by Conant et al. (1990) of Americas High Growth Midsized Companies Succeed, Bantam, New

York. 1985.multi-item scales and the paragraph approach, then the identi-


Conant, J. S., Mokwa, M. P., and Varadarajan, P. R.: Strategic Types, and Firm Performance: A Market-contingent Perspective. Journalof Marketing 53 (July 1989): 2135.Distinctive Marketing Competencies and Organizational Perfor-

mance: A Multiple Measures-Based Study. Strategic Management Miles, R. E., and Snow, C. C.: Organizational Strategy, Structure andJournal 11 (JulyAugust 1990): 365383. Process, McGraw-Hill, New York. 1978.

Mintzberg, H.: Generic Strategies: Toward a Comprehensive Frame-Dess, G. S., and Robinson, Jr., R. B.: Measuring Organizational Perfor-work, in Advances in Strategic Management, vol. 5, R. Lamb and P.mance in the Absence of Objective Measures. Strategic ManagementShrivastava, eds., JAI Press, Greenwich, CT. 1988, pp. 168.Journal 5 (JulySeptember 1984): 467488.

Nunnally, J.: Psychometric Theory, McGraw-Hill, New York. 1978.Dess, G. S., and P. S. Davis: Porters (1980) Generic Strategies asPeter, J. P.: Reliability: A Review of Psychometric Basics and RecentDeterminants of Strategic Group Membership and Organized Per-

Marketing Practices. Journal of Marketing Research 16 (Februaryformance. Academy of Management Journal 27 (September 1984):1979): 617.467488.

Peter, J. P.: Construct Validity: A Review of Basic Issues and MarketingHambrick, D. C.: Environmental Scanning and Organizational Strategy. Practices. Journal of Marketing Research 18 (May 1981): 133145.

Strategic Management Journal 3 (AprilJune 1982): 159174.Porter, M. E.: Competitive Strategy: Techniques for Analyzing Industries

Hambrick, D.C.: Some Tests of the Effectiveness and Functional Attri- and Competitors, The Free Press, New York. 1980.butes of Miles and Snows Strategic Types. Academy of Management Saunders, J., and Wong, V.: In Search of Excellence in the UK. JournalJournal 26 (March 1983): 526. of Marketing Management 1 (Winter 1985): 119137.

Segev, E.: A Systematic Comparative Analysis and Synthesis of TwoHarrigan, K. R.: Research Methodologies for Contingency ApproachesBusiness-Level Strategic Typologies. Strategic Management Journalto Business Strategy. Academy of Management Journal 26 (March10 (1989): 487505.1983): 526.

Siegel, S.: Nonparametric Statistics for the Behavioral Sciences, McGraw-Hays, W.: Statistics, Holt, Rinehart and Winston, New York. 1973.Hill, New York. 1956.

Huber, G. P., and Power, D. J.: Retrospective Reports on Strategic Smith, K. G., Guthrie, J. P., and Chen, M.: Miles and Snows TypologyLevel Managers: Guidelines for Increasing Their Accuracy. Strategic of Strategy, Organizational Size and Organizational Performance.Management Journal 6 (AprilJune 1985): 171180. Academy of Management Proceedings (1986): 4549.

Snow, C. C., and D. C. Hambrick: Measuring Organizational Strategies:Kerlinger, F. N.: Foundations of Behavioral Research, Holt, Rinehart andSome Theoretical and Methodological Problems. Academy of Man-Winston, New York. 1973.agement Review 5 (October 1990): 527538.

Kotler, P.: Marketing Management: Analysis, Planning, Implementation, &Venkatraman, N., and Ramanujam, V.: Measurement of Business Per-Control, Prentice-Hall, Englewood Cliffs, NJ. 1991.

formance in Strategy Research: A Comparison of Approaches. Acad-emy of Management Review 11 (October 1986): 810814.McKee, D. O., Varadarajan, P., and Pride, W. M.: Strategic Adaptability

1-s2.0-S0148296397002324-main

Documents

Transcript of 1-s2.0-S0148296397002324-main