Measuring marketing capabilities? It’s possible and useful!

Measuring marketing capabilities? It’s possible and useful!

In life, to meet challenges, you have to have the corresponding capabilities. It’s the same for companies: organizational capabilities, that are adapted to the key success factors of challenges, represent a guarantee of more or less satisfactory performance depending on expectations and objectives. In addition, these virtues can be dynamic when these capabilities make it possible to continuously bring to light new skills that will be adapted to the emergence of new key success factors.

These general—and ultimately trivial—considerations highlight the importance for a company’s marketing strategy to examine, build or reinforce such marketing capabilities. The stake—and probable difficulty—to properly define them first, identify them second, and gauge them at last is another very important issue.

However, it is such a project that animated Philippe Massiera, Laura Trinchera, and Giorgio Russolillo. The results of the data analysis collected from a sample of 199 French SMEs were recently published in Recherche et Applications en Marketing.

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Marketing capabilities: showing what the SME got under the hood

Measuring marketing capabilities: an important and reachable end-goal…

First, the authors determined the main dimensions as well as sub-dimensions of collective capabilities in the very specific context of French SMEs. Following a model building and statistical validation of the developed measurement tools, the authors propose a framework that—with regard to the link established between capabilities and firm performance—provides an audit tool for conducting ‘large-scale studies’ to the actors concerned with the financial health and development of French (very) small and medium companies. This new data analytics tool allows managers to evaluate quantitatively, on three levels of abstraction, the more or less strong presence of marketing capabilities within their companies.

The validation phase of this tool was performed using the PLS approach for models with latent variables (PLS-PM). For researchers who would like to know more about this method, the article discusses in detail the steps required for the development and validation of a third-order formative multidimensional index.

Very helpful for managers…

As a measurement tool subject to practitioners’ use, its perceived utility will be great among economic actors—namely, the SMEs themselves and their executive managers for whom the relative level of these capabilities greatly determines the competitiveness of the firm and its performance in the targeted markets. In addition, for the most dynamic and successful among these SMEs, these capabilities also offer the ability to evolve and regenerate the sources of the competitive advantage by adapting to new emerging combinations of key success factors.

… and researchers, but for different reasons.

This article, which sets out and explains in detail the method for developing and validating measurement tools, is likely to interest all the actors concerned by these issues, such as market researchers, research directors, research engineers, as well as analysts, statisticians and econometricians, or data analysts, data scientists and data miners. It will also be of interest to those involved in scientific research who apply, or wish to apply, formative measurement models with latent variables.

With such a measurement tool, executive managers or researchers should be able to validate or not the widespread belief that SMEs have little—if any—marketing capabilities!

Massiera, P., Trinchera, L. et Russolillo, G. (2018), Evaluating the presence of marketing capabilities: A multidimensional, hierarchical index, Research and Applications in Marketing, 33(1), 30-52.

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