Leigh McAlister

A basic step in scientific inquiry entails ordering, classifying, or grouping the phenomena under investigation—that is, developing a taxonomy. Yet no method-transparent taxonomy of marketing organization types has been established, creating significant confusion among both managers and theoreticians. Many marketers, inspired by educators, assume that marketing organizations control all marketing-related decisions, yet skeptics counter with assertions that instead, marketing organizations simply put a positive spin on the meaningful value created by others in the company. The method-transparent taxonomic study presented in this article addresses this debate and reveals three marketing organization types: Growth Champions, which reflect a textbook view, representing about 17% of the sample firms; Service Providers, consistent with the skeptics’ view, equivalent to about 43% of the sample firms; and Marcom Leaders, a third marketing organization type in which marketers are primarily responsible for brands and communications, representing about 40% of the sample firms. Establishing these different marketing organization types can help address conflicting views about marketing organizations. The conceptual typology underlying the empirical taxonomy also clarifies why the different marketing organization types exist and suggests hypotheses, specific to each marketing organization type, that might address previously unresolved research questions.

A typical customer relationship management model is designed to increase the value of a company’s existing customers in the next period. While useful in the short term, such a process, followed blindly period after period, would drive the company out of business when those existing customers all eventually died. In reality, no company would do this. Instead, these short-term models are nested within a long-term view of customer management, and it is long-term customer management that the proposed model addresses. The model assumes that a company has identified a set of customer types across which it needs balance in order to remain viable in the long-term (e.g., a company might wish to maintain a supply of “entry-level customers” in order to eventually replenish its collection of more profitable “loyal customers”). Though the model is applicable in any industry, we illustrate it for automobiles. Results reveal the strengths with which each marketing intervention causes General Motors to attract each of their desired customer types. The model is extended to also reveal differences in the ways that marketing interventions by Ford, Toyota, and Honda change the strengths with which those automakers attract customers.

Advertising's influence on firm sales and firm value has drawn early attention from economists and accountants and more recent attention from marketers. Most studies that have investigated a link between advertising and sales have found such a link. However, studies that have investigated a link between advertising and firm value have only sometimes found that link. Meta-analysis has failed to determine moderators that govern the link between advertising and firm value. In this article, the authors hypothesize that advertising influences firm value for a differentiator because advertising can elaborate the firm's point of difference into brand equity, thereby building firm value. Advertising cannot build brand equity for a cost leader because such a firm has no point of difference on which to build. Identifying differentiators and cost leaders on the basis of firms’ reactions to a change in accounting regulations, the authors confirm hypotheses: advertising is related to sales for all firms, but it is more strongly related to firm value for differentiators than for cost leaders. Beyond explaining differences in advertising effectiveness, this study's indicator of differentiation versus cost leadership should enhance future analyses of marketing's effect on firm-level outcomes using archival financial data.

The positioning of McAlister's (2005) arguments (“Toward Insight and Relevance”) in Gaski's comment as being the polar opposite of those proposed by Holbrook (2005) misses McAlister's point. Rather than proposing that all research and teaching should be managerially relevant, McAlister argued that managerial relevance should not be viewed as an impediment to a successful research career in consumer behavior.

Marketing executives are being urged to speak in the language of finance to gain internal support for marketing initiatives. Responding to this call, the authors examine the impact of a firm's advertising and its research and development (R&D) on the systematic risk of its stock, a key metric for publicly listed firms. They hypothesize that a firm's advertising and R&D expenditures create intangible assets that insulate it from stock market changes, lowering its systematic risk. They test the hypotheses using a panel data on 644 publicly listed firms between 1979 and 2001, consisting of five-year moving windows. They scale the firm's advertising and R&D expenditures by its sales. After controlling for factors that accounting and finance researchers have shown to be associated with systematic risk, the authors find that advertising/sales and R&D/sales lower a firm's systematic risk. The article's findings extend prior research that has focused primarily on the effect of marketing initiatives on pe...