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Industrial Marketing Managem

Developing marketing capabilities for customer value creation throughMarketing–Sales integration

Paolo Guenzi a,⁎, Gabriele Troilo a,b

a Università L. Bocconi and SDA Bocconi School of Management, Italyb Universidad Autònoma de Barcelona, Spain

Received 26 January 2006; received in revised form 26 May 2006; accepted 10 June 2006Available online 28 July 2006

Abstract

The capacity to create superior customer value stems from the marketing capabilities a company possesses. A considerable body of researchhas indicated that market oriented companies have distinctive marketing capabilities which lead to superior organizational performance. Althoughit has been widely recognized that the development of marketing capabilities requires the joint effort of Marketing and Sales departments, almostno attention has been devoted to investigating the integration of these two functions. This study reports on an exploratory effort to use the means–end theory in explaining Marketing–Sales integration. Findings show that Marketing–Sales integration is a multi-faceted construct made up ofdifferent components that impact different marketing capabilities and highlight its antecedents and consequences.© 2006 Elsevier Inc. All rights reserved.

Keywords: Marketing–Sales relationships; Interdepartmental integration; Marketing capabilities; Means–end theory; Laddering

1. Introduction

One of the cornerstones of modern marketing thought is thatmarket oriented companies are better equipped to meet thegeneration of superior customer value and, as a consequence, toattain sustainable competitive advantage. Several studies showthat market orientation is positively related to organizationalperformance (Jaworski & Kohli, 1993; Narver & Slater, 1990;Ruekert, 1992; Slater & Narver, 1994). The ability to generatesuperior customer value is dependent on the availability ofdistinctive marketing capabilities (Day, 1994a; Hult & Ketchen,2001; Slater & Narver, 1995, 2000).

Inter-functional relationships are at the basis of the marketorientation construct. Narver and Slater (1990) consider inter-functional coordination as a component of the construct, where-as Kohli and Jaworski (1990) suggest that interdepartmentaldynamics are an antecedent of market orientation. In short,

⁎ Corresponding author. Università L. Bocconi, Italy.E-mail address: paolo.guenzi@sdabocconi.it (P. Guenzi).

0019-8501/$ - see front matter © 2006 Elsevier Inc. All rights reserved.doi:10.1016/j.indmarman.2006.06.006

market oriented companies are characterized by a high level ofintegration of market-related knowledge and skills.

Prior research shows that knowledge and skills regardingmarket-related activities are spread throughout the organization,the highest concentration, as one would expect, in the twodepartments traditionally responsible for managing market rela-tionships: Marketing and Sales (Homburg, Workman, & Jensen,2000; Homburg, Workman, & Krohmer, 1999; Krohmer,Homburg, & Workman, 2002; Rouziès et al., 2005; Zoltners,2004). Despite the fact that Marketing and Sales often shareresponsibility for many common activities, their rapport is notwithout problems (Anderson, 1996; Carpenter, 1992; Shocker,Srivastava, & Ruekert, 1994; Strahle, Spiro, & Acito, 1996). Asa result, opportunities for a company to create superior customervalue risk being seriously challenged. Even though the existingliterature (Dewsnap & Jobber, 2000, 2002; Rouziès et al., 2005)has contributed to enhancing our knowledge on Marketing–Sales integration, research in this area is still scarce.

The purpose of this study is to explore the contribution ofMarketing–Sales integration to the development of marketingcapabilities, and, as a consequence, to the creation of superiorvalue for the customer. In particular, our objectives are to better

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clarify and detail the integration construct; to investigate howMarketing–Sales integration can impact different marketingcapabilities; and, finally, to identify potential antecedents whichmay foster Marketing–Sales integration.

The article, therefore, is structured as follows. Firstly, aliterature review on marketing capabilities and Marketing–Sales integration highlights the limitations of prior researchregarding the contribution of the two departments (and theirintegration) to the creation of superior customer value. Second-ly, our methodological approach is described and findings of theexploratory research on Marketing–Sales integration are pre-sented and discussed. Lastly, a discussion of theoretical andmanagerial implications and possibilities for future research onthe topic conclude the paper.

2. Literature review

2.1. Marketing capabilities and the contribution of Marketingand Sales departments

Over the last decade, a growing number of studies havehighlighted the role of marketing capabilities in the attainmentof a firm's competitive advantage. Leveraging on the resource-based view of the firm (Barney, 1991; Grant, 1991; Peteraf, 1993;Wernerfelt, 1984) and on the capability-based view of the firm(Grant, 1996; Prahalad & Hamel, 1990; Teece, Pisano, & Shuen,1997), marketing researchers demonstrated that marketingresources and capabilities can contribute to the creation of acompetitive advantage because they may be rare, difficult toachieve, difficult to duplicate and their value can be appropriatedby the organization (Dutta, Narasimhan, & Rajiv, 1999; Hooley,Greenley, Cadogan, & Fahy, 2005; Hunt & Morgan, 1995;Vorhies, Harker, & Rao, 1999; Weerawardena, 2003a).

Marketing capabilities have been defined as “the integrativeprocesses designed to apply collective knowledge, skills andresources of the firm to market-related needs of the business,enabling the business to add value to its goods and services,adapt to market conditions, take advantage of market oppor-tunities and meet competitive threats” (Vorhies, 1998: 4). How-ever, the literature also suggests the existence of differentclassifications of marketing capabilities. All of them share theassumption that these capabilities are exercised through specificmarketing processes. The most popular one has been proposedby Day (1994a) who distinguishes between market sensing andcustomer-linking capabilities: the first referring to the ability ofa company to identify customers' needs, the second referring tothe ability to build relationship with them. Still other authorsclaim that market oriented companies share a distinctive capabi-lity, that is, the ability to learn from the market (Li & Calantone,1998; Slater & Narver, 1995; Weerawardena, 2003a,b). In fact,the capacity to collect, disseminate and use market-basedinformation is key to the growth of organizational performance(Jaworski & Kohli, 1993; Narver & Slater, 1990).

Several studies point out that an effective development ofmarketing capabilities calls for both Marketing and Sales de-partments to modify their role and practices in order to increasethe coordination of their activities and give life to integrated

processes (e.g. Cespedes, 1993; Day, 1994a; Slater & Narver,1995). However, scholars have devoted very limited attention towhich mechanisms a firm may use to foster the coordination ofthe two units, since both are involved in the design and imple-mentation of marketing processes. Almost all studies on thistopic implicitly assume that marketing activities are under thecomplete responsibility and control of a single organizationalunit, namely, the Marketing department. However, this assump-tion does not hold true if one takes into account that in manymodern corporations, it is the Sales department that actually hasmore influence than Marketing on many of the so-called“marketing” decisions (Homburg et al., 1999; Krohmer et al.,2002). Based on the above, the development of marketingcapabilities requires a joint effort of the two departments andtheir integration comes to the fore as a relevant theoretical andmanagerial issue.

2.2. Marketing–Sales integration

Marketing–Sales integration is “the extent to which theactivities carried out by the two functions are supportive of eachother” (Rouziès et al., 2005: 115). In modern companies,Marketing and Sales are kept separate due to the specializedtasks each is called upon to deal with in the external environ-ment (Cespedes, 1993; Dewsnap & Jobber, 2000): the Market-ing department is usually focused on customer marketing, brandmanagement, advertising management, marketing research;while the Sales department is focused on trade marketing, tradenegotiations, channel management. However, as stated byLawrence and Lorsch (1967), organizational functioning requiresdifferentiation and integration, where the former meets the needfor specialization, and the latter ensures the direction of effortsand resources toward a common goal.

Literature on Marketing–Sales integration is quite scarce andmostly devoted to exploring the barriers to integration. Drawingon new product development literature (e.g. Fisher, Maltz, &Jaworski, 1997; Griffin &Hauser, 1996; Gupta, Raj, &Wilemon,1986; Maltz, 1997), Dewsnap and Jobber (2002) highlight therole of socio-psychological differences between the two groups.Similarly, Rouziès et al. (2005) confirm that a major impedimentto Marketing–Sales integration is created by the different mind-sets of employees of the two units. Unfortunately, however, bothDewsnap and Jobber (2002) and Rouziès et al. (2005) onlydevelop conceptual frameworks. They do not empirically test therelationship between the existence of such impediments andMarketing–Sales integration, nor do they test the impact ofpotentially beneficial antecedents on integration. Surprisingly, awidely accepted definition and a measure of the integrationconstruct are still eluding the literature (Rouziès et al., 2005).

Previous research onMarketing integration with departmentsother than Sales might provide some help. Kahn and his col-leagues (Kahn, 1996, 2001; Kahn & McDonough, 1997; Kahn&Mentzer, 1998) suggest that interdepartmental integration is acombination of interaction and collaboration. Interaction re-gards communication flows between the two organization units.Effective interaction takes place when functions regularlyexchange information in a formalized way through meetings,

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memoranda, documents, etc. Collaboration, on the other hand,requires that the two functions be willing to work together andshare the same vision, goal and resources. However, otherscholars (Dewsnap & Jobber, 2000; Fisher et al., 1997; Maltz &Kohli, 1996; Rouziès et al., 2005) claim that some of thecomponents of the integration construct highlighted by Kahnand colleagues – like information exchange, communication,teamwork, shared goals – just play the role of antecedents toMarketing–Sales integration.

Moreover, Kahn and colleagues (Kahn, 1996, 2001; Kahn &McDonough, 1997; Kahn &Mentzer, 1998) posit that successfulintegration relationships with Marketing depend on whichfunctional unit or department is to be integrated. They suggestthat different interdepartmental relationships warrant specificinvestigation.

2.2.1. Summary and objectivesOur literature review reveals four limitations to existing

studies. Firstly, despite the fact that marketing capabilities aredefined as “integrative processes” (Day, 1994a; Vorhies, 1998), aclear explanation of how these processes function is still, in ourview, missing. Much of the research emphasizes the need forintegration (Ruekert & Walker, 1987) but there is no theoreticalexplanation nor empirical evidence to support that differentmarketing capabilities may require various levels of integration.Similarly, it remains unclear as to whether those capabilitieswould be affected differently by the various components ofintegration.

Secondly, marketing organization studies emphasize the‘shared’ responsibilities and activities between Sales andMarketing departments in today's modern firms (Homburg etal., 1999; Krohmer et al., 2002). Similarly, marketing strategyresearch posits that the capacity to offer superior customer valueand to achieve a competitive advantage requires a joint effort ofMarketing and Sales departments (e.g. Cross, Hartley, Rudelius,& Vassey, 2001; Slater & Olson, 2000). However, prior researchon marketing capabilities does not seem to recognize the jointcontribution of Marketing and Sales departments in the deve-lopment of those capabilities, assuming that marketing activitiesfall under the responsibility of a single department and that therelationships between Marketing and Sales are non-problematic.On the contrary, literature on Marketing–Sales interface demon-strates that it is not the case (Anderson, 1996; Carpenter, 1992;Shocker et al., 1994; Strahle et al., 1996). We therefore maintainthat the contribution of integration between Marketing and Salesto the development of marketing capabilities remains mostlyunexamined.

Thirdly, there is no widespread agreement on the nature ofthe Marketing–Sales integration construct. The scarce literaturethat does exist on the topic is purely theoretical (Dewsnap &Jobber, 2000, 2002; Rouziès et al., 2005). Clear and detailedspecification of the construct is still lacking. What is present inthe literature leverages on Marketing integration with other non-Sales departments and hence ignores the rather peculiar rela-tionship that exists between Sales and Marketing. In fact, thetwo departments are resource interdependent, their activitiesand responsibilities overlap and the change in the organizational

design of many modern corporations makes the two functionsincreasingly intertwined (Workman, Homburg, & Jensen,2003).

Fourthly, there has been little field research to date regardingthe antecedents and consequences of Marketing–Sales integra-tion. Literature onMarketing relationshipswith other departments(excluding Sales) has analyzed a number of integrating mechan-isms (Leenders & Wierenga, 2002; Maltz & Kohli, 2000),demonstrating that they are not equally effective in terms of thedifferent expected integration outcomes. Furthermore, prior re-search on the consequences ofMarketing relationships with otherfunctions (Kahn, 1996, 2001; Kahn &Mentzer, 1998) shows thatthe outcomes of these relationships are indeed different for eachcross-functional relationship type. As a result, an analysis of thespecific drivers and consequences ofMarketing–Sales integrationis still missing.

Considering these limitations in extant research, we designeda field research project with several objectives. The first objec-tive was to depict a more comprehensive and detailed view ofthe construct in terms of its components and the relationshipsamong them. The second objective was to disentangle therelationships between Marketing–Sales integration and specificmarketing capabilities. In particular, we wanted to explore therole played by the different components of integration in thedevelopment of the marketing capabilities described in extantliterature. Finally, we aimed at depicting a clearer picture ofantecedents and consequences of Marketing–Sales integrationby exploring the different nature of antecedents and describingthe consequences of integration in terms of valuable outcomesfor the customer.

3. The study

Due to the lack of robust conceptual and empirical founda-tions for our topic, we adopted an exploratory approach with aqualitative research design. We are interested in exploring therelationship between Marketing–Sales integration with its ante-cedents and consequences, hence the method we selected wasthe laddering technique based on means–end theory.

As pointed out by Foote and Lamb (2002), laddering pro-vides for an opportunity to clarify meanings, explanations, goalsand values beyond that achievable with the more widely usedtechniques of questionnaires and semi-structured interviews. Infact, the resultant data potentially allows for the use of quali-tative and quantitative analysis meaningfully without the neces-sity for large respondent samples. Compared to other interviewingtechniques, laddering has several important advantages. Firstly, itreduces the risk that some important attributes/benefits are over-looked in the in-depth interviews (Botschen, Thelen, & Pieters,1999). Secondly, it allows for the conversion of the qualitativedata (i.e. the raw verbatim responses) into nominal codes that canbe quantified (Gengler & Reynolds, 1995). This in turn permits ashift from the ladders produced by many individuals to theaggregate cognitive structure of a group of people. These can beinterpreted as “dominantways of thinking” (Reynolds&Gutman,1988). Finally, laddering facilitates the construction of Hierar-chical Value Maps, which graphically display a well-organized

Table 1Descriptive information on respondents interviewed in the first step of theresearch process

Respondent Gender Market Job position

1 Female Beverage (non-alcoholic drinks) Marketing manager2 Male Electrical equipment Marketing manager3 Male Automotive spare parts Sales Manager4 Male Professional coffee machines Sales Manager5 Male Cement, aggregates,

concrete and construction-related services

Sales Manager

6 Male Professional hand-tools Sales Manager7 Female Luxury goods Marketing manager8 Male Stainless steel flat products CEO9 Male Construction materials Marketing manager10 Male Medical equipment CEO11 Male Beverage (alcoholic drinks) Marketing manager12 Male Coffee Marketing manager

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summary of the information derived from the interviews (Claeys,Swinnen, & Vanden Abeele, 1995).

According to means–end theory, three categories of meaningare typically associated with a concept (Thompson & Chen,1998): a) attributes (the means) i.e. relatively concrete meaningsthat represent the observable, perceived characteristics of theobject of analysis; b) consequences, i.e. more abstract meaningsreflecting the perceived functional or psycho-social benefits orcosts associated with specific attributes; c) personal values, i.e.highly abstract meanings referring to enduring end-states ofexistence that respondents seek to achieve through their behavior.Originally developed for analyzing and interpreting consumerbehavior (Gutman, 1982), means–end has more recently beenapplied for eliciting information from managers about organiza-tional culture (Rugg, Mahmood, Rehman, Andrews, & Davies,2002), personal values (Bourne & Jenkins, 2005; Foote & Lamb,2002) and success factors for specific job positions, such as thesales managers (Deeter-Schmelz, Kennedy, & Goebel, 2002).

Laddering (Reynolds & Gutman, 1988) employs a one-to-oneinterviewing technique in which a series of directed probes areused to reveal how respondents link the attributes of the object ofanalysis (the integration of Marketing and Sales departments inour case) to their own underlying values. This allows researchersto determine the ladder of linkages between attributes, conse-quences and values.

Since using laddering implies the risk of incurring in wrongor biased interpretations when content-analyzing verbal datacollected through the laddering interview technique (Langerak,Peelen, & Nijssen, 1999; White & Kokotsaki, 2004), wedecided to run some preliminary interviews to gain some in-sights on the topic under investigation. In fact coding “chunks”of meaning to which each verbatim should be assigned is acomplicated process that gives a lot of latitude to the researcher.Hence, coding should preferably not be based on theresearcher's idiosyncratic cognitive categories (Grunert &Grunert, 1995). Thus, we conducted 12 in-depth interviewswith marketing managers, sales managers and CEOs of compa-nies operating in different environments (i.e. both business tobusiness and business to consumer goods and services). We are,after all, probing into the nature of Marketing–Sales integrationand how it contributes to developing marketing capabilities andsuperior customer value. Moreover, in the case this contributionwere to be further developed, we would be interested in under-standing the managerial tools respondents perceived as useful tofoster integration. Therefore, interviews covered three mainissues: what is Marketing–Sales integration and how is itinterpreted by managers? Why is such integration relevant?How can such integration be improved?

Each interview lasted between 45 and 90 min. Table 1provides some descriptive information on respondents.

Subsequently, we used means–end chain theory and theladdering technique. Consistent with Reynolds, Dethloff, andWestberg's (2001) argument that a minimum of 20 respondentsshould be interviewed, we interviewed 33 executives attendingdifferent Marketing and/or Sales courses at a major businessschool. Worthy of note is that none of these courses dealt with thetopic of the relationship between these two functions in any way.

All interviews were audio recorded and transcribed verbatim.The number of interviews is consistent with previous exploratoryanalysis based on the same research technique (see Bourne &Jenkins, 2005; Foote & Lamb, 2002; Rugg et al., 2002;Thompson & Chen, 1998), while the variety of profiles in thesample ensures the general applicability of results, avoiding themere description of policy and behavior of a specific firm ororganization. The final respondents are executives of companiesoperating in B2B markets (54.5%) and consumer markets(45.5%) in many different industries (e.g. FMCG, banking,telecommunications, medical equipment, etc.) As for the jobposition of our respondents, 51.5% work in the Marketingdepartment, 36.4% in the Sales function, and 12.1% have dif-ferent roles (e.g. CEO, business unit director, etc.). In keepingwith Reynolds and Gutman's (1988) recommendations, respon-dent introspection was facilitated by presenting the interviewer asa facilitator and the respondent as the expert. Before starting eachinterview, the fact that there were no right or wrong answers wasmade clear and that the purpose was simply to understand therespondent's opinion. The interview started asking eachrespondent to indicate 5 to 8 mechanisms he or she consideredimportant for fostering effective integration of Marketing andSales departments. This free elicitation of relevant attributes is acommon practice in means–end research (Botschen et al., 1999).This list of attributes served as a basis for asking the question“why is that important to you?”. This procedure was repeatedvarying the actual wording of the probe (e.g. “why is that?”,“what happens if this is absent?”) or by evoking specificsituational contexts. This gradually led respondents to higher-level distinctions and helped them move forward.

4. Findings

4.1. Preliminary interviews

Regarding the meaning of Marketing–Sales integration, manydifferent interpretations emerged. Integration was described byexecutives in terms of coordination, collaboration, communica-tion, working relationships, level of conflict, distribution of

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power. Many respondents provided different definitions of theintegration concept during the interview, pointing out that inte-gration can refer to different levels: integration of goals, resourcesor activities carried out by the two departments in question. Asone marketing manager pointed out:

We [the Sales department and us] may share our goals. Butsharing plans and resources is a completely different story.

This evidence suggests that integration is a complex andmulti-faceted construct. For example, some managers claimedthat sharing decisions does not imply accepting them.Similarly, it was noted that knowing one's counterparts doesnot always equate to understanding them or to being able to putthemselves in the ‘other department's shoes’ per se. Thiscomplexity is clear in the following statement made by a salesmanager:

They [colleagues from the Marketing department] knowwhat we do. We share a lot of information and regularlymeet them every week. However, I am not sure that they

Table 2Definitions of variables used for the Hierarchical Value Map

Code Label Definition

A2 Physical location Spatial proximity of MarA6 Exchange of documentation (e.g. report, fax,

memoranda, etc.)People from Marketing a

A7 Training People from Marketing aA8 ICT (e.g. mail, database, phone, etc.) People from Marketing aA9 Job rotation The company stimulatesA10 Planned meetings People from Marketing a

(e.g. monthly meetings)A11 Unplanned meetings People from Marketing aA12 Organizational structure The company's organizaA15 Reward systems The company adopts som

interdepartmental goalsA16 Corporate strategy and culture The company's strategyA18 Joint customer calls People from Marketing aC2 Better decisions Improving speed and quaC3 Better implementation Improving the actual impC4 Consistency and synergies Reducing waste of organC5 Collaboration Interdepartmental relationC6 Commitment Increasing job commitmeC8 Sharing goals and resources Each department knowsC9 Less conflict Reducing the parties' neg

the attainment of own goC10 Confrontation Openness and willingnesC11 Communication Exchanging informationC12 Better market knowledge Broadening and deepeninC13 Helping the counterpart Willingness to solve theC14 Understanding the counterpart Developing a better knowC15 Broader perspective Taking into account the cC17 Motivation Increasing job motivationC18 Positive work climate Developing esprit de corC19 Solving customer problems Improving the ability toC22 Shared strategies and plans Each department knowsC24 Trust in the counterpart Thinking that the counteV1 Achieving corporate success Ability to outperform comV3 Achieving corporate goals Ability to accomplish theV4 Improving corporate image Ability to increase the coV6 Innovation Ability to create new proV8 Employee satisfaction Ability to satisfy employV9 Customer satisfaction Overall ability to satisfy

really understand what our job is about. Product managersseldom call on customers with our salespeople. As a conse-quence, I don't think we truly trust each other. I don'tknow… I am not sure we can properly say that we have ahigh level of integration.

The complex network of subjective mental associations isapparent if one considers that in some cases the same conceptwas interpreted in opposite ways by different respondents,depending on the connections they made between that conceptand positive or negative consequences. For example, in mostcases power imbalance between the two departments wasconsidered detrimental to interfunctional integration. However,as one marketing manager pointed out:

To some degree, I think that power imbalance is good. Weneed to get things done rapidly. Clarity is more importantthan equity. When we have a meeting, we need to come outwith decisions, even though they are perceived as “unfair”by some.

keting and Sales officesnd Sales departments interact by exchanging standard written documents

nd Sales departments jointly participate to cross-functional training programsnd Sales departments interact by exchanging information through ICT toolsjob rotation between Marketing and Sales departmentsnd Sales departments regularly interact by participating to fixed contact points

nd Sales departments interact by organizing informal meetingstional structure facilitates interaction between Marketing and Sales departmentse form of cross-functional incentive schemes based on the attainment of

and culture support interdepartmental interaction and collaborationccompany salespeople calling on customerslity of decision-making processeslementation of decisions, strategies and plansizational resources, optimizing resource allocations are characterized by goodwill, mutual respect and teamworknt of employeesthe other department's goals and resourcesative emotional reactions to perceived disagreements and interference withalss to listen to the counterpart's arguments

g the understanding of market phenomenacounterpart's problemsledge of the working conditions and problems of the counterpartounterpart's point of viewof employees

ps and improving the working conditions in terms of quality of social relationssolve customer problemsthe other department's strategies and plansrpart is reliable, dependable and acts in the other department's interestpetitorsgoals set by the companympany reputationducts and servicesees' job requirementscustomer needs

Table 3Macro-categories used for the Hierarchical Value Map

Code Label Sum of direct (XX)and indirect (YY)relationships XX.YY

Out In

A1 Common budget 4.24 –A2 Physical location 6.59 –A3 Common plans 3.19 –A4 Common research 1.6 –A5 Recruitment criteria and policies 1.3 –A6 Exchange of documentation (e.g. report,

fax, memoranda, etc.)13.91 –

A7 Training 11.64 –A8 ICT (e.g. mail, database, phone, etc.) 15.143 –A9 Job rotation 8.50 –A10 Planned meetings 26.217 –A11 Unplanned meetings 8.53 –A12 Organizational structure 24.168 –A13 Personal characteristics 7.39 –A14 Total quality management 5.28 –A15 Reward systems 12.76 –A16 Corporate strategy and culture 15.124 –A17 Teams 4.34 –A18 Joint customer calls 11.108. –C1 Accepting decisions 5.11 6.30C2 Better decisions 20.14 28.115C3 Better implementation 13.6 23.112C4 Consistency and synergies 16.9 28.97C5 Collaboration 25.51 22.40C6 Commitment 15.20 10.46C7 Common decisions 3.6 7.21C8 Sharing goals and resources 10.8 14.37C9 Less conflict 11.22 14.47C10 Confrontation 19.56 19.20C11 Communication 72.179 112.19C12 Better market knowledge 42.61 29.137C13 Helping the counterpart 9.6 10.42C14 Understanding the counterpart 29.57 35.42C15 Broader perspective 22.12 13.63C16 More responsibilities 6.4 4.16C17 Motivation 9.12 8.36C18 Positive work climate 16.14 19.69C19 Solving customer problems 18.12 21.94C20 Time and resources saving 1.6 7.61C21 Shared goals 2.1 3.5C22 Shared strategies and plans 25.29 24.84C23 Self-improvement 1.4 2.12C24 Trust in the counterpart 11.11 10.46V1 Achieving corporate success – 37.172V2 Increasing creativity – 4.6V3 Achieving corporate goals – 18.85V4 Improving corporate image – 6.44V5 Organizational flexibility – 2.16V6 Innovation – 14.84V7 Crisis resolution – 1.9V8 Employee satisfaction – 12.66V9 Customer satisfaction – 16.62

Dropped items are in italics; bold characters show the highest frequencies.

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Similar considerations hold true for conflict. One marketingmanager emphasized that:

Our CEO believes that conflict is positive, because it helpsmotivating people and getting the most from each depart-ment […] moreover, by stimulating interfunctional conflicts,the CEO aims at dividing functional managers: this way, heavoids being the minority when decisions must be made.

Among the most cited reasons for poor integration (and inmany cases even for conflict) between Marketing and Sales is theexistence of different perspectives and time frames used in theprocesses of goal setting, resource allocation and performanceevaluation (e.g. Rouziès et al., 2005; Strahle et al., 1996). Suchdifferences obviously lead to conflicting priorities and inconsis-tent activities, because Marketing mainly adopts a strategic, long-term perspective, while Sales primarily focuses on tactical, short-term objectives and activities. This radical difference is apparentin the following quote by one sales manager:

To me, marketing is a dream, while sales are real life.

Addressing the importance of achieving integration, inkeeping with Cespedes (1993), managers pointed out thatMarketing and Sales perform interrelated tasks, which oftenlead to overlapping situations that spark confusion anduncertainty about who is required to do what. Hence, inter-functional integration is needed to improve the performance ofjoint and/or complementary activities, since effective imple-mentation requires the existence of positive cross-functionalrelationships (e.g. Dewsnap & Jobber, 2000; Ellinger, 2000).However, respondents had differing interpretations on perfor-mance indicators that were affected by achieving strongintegration between Marketing and Sales: for example, allmanagers mentioned process improvements (e.g. “more data-driven decision making” or “faster implementation of strategiesand plans”), while only eight managers explicitly indicated theimpact on bottom-line performance and seven respondentspointed out the positive impact on socio-psychological aspectsrelated to organizational climate.

Finally, respondents suggested a number of different ways toimprove Marketing–Sales integration. In keeping with Rouzièset al. (2005), these integrating mechanisms belong to companyculture (e.g. market orientation), structure (e.g. use of a directsales force), processes (e.g. cross-functional incentive systems)and personal characteristics (e.g. collaborative attitude). Allrespondents mentioned processes, while company culture,structure and personal characteristics were cited by five, eightand six managers, respectively.

These results helped us in two ways. They suggested ourpaying much more attention to different components of theintegration construct. As stated earlier, the literature reviewsuggested that interaction and collaboration should have beenthe components to focus on, whereas our respondents gave us amuch broader view of the concept. We also collected a list ofcodes, related to components of the Marketing–Sales integra-tion construct, to be used during data interpretation in the nextstep of this study. The availability of the list helped us reducethe bias derived by our idiosyncratic cognitive structures.

4.2. Laddering

The research team started out by content analyzing theinterview transcripts: ladders of each response were classified

Fig. 1. Hierarchical Value Map.

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into attributes, consequences and values. These summary codeswere then aggregated into a smaller number of broad categories.Much consideration was given to how fine-grained the codingshould be. In line with Van Rekom, Van Riel, and Wierenga(2006), we chose a conservative approach to avoid excessivelybroad categories. Nevertheless, this still led to some 51 codes,which are consistent with the threshold suggested by Genglerand Reynolds (1995, p.24).

Thus through the coding process we identified 18 attributes,24 consequences and 9 values (Table 2 presents a shortdefinition of variables). Next, connections between attributes,consequences and values were summarized in an implicationmatrix representing the number of both direct and indirectconnections between each attribute, consequence and value(Klenosky, Gengler, & Mulvey, 1993).

The implication matrix, a square matrix whose size reflectsthe set of elements identified through the coding process, showsattributes, benefits and values that act as the row and columnelements. The cells contain the frequency in which a particular

column element is mentioned after a particular row element,aggregated across subjects and laddering. Both direct andindirect linkages between meanings are entered and the dia-gonal remains empty since a particular row element cannot bementioned after itself.

Overall, 588 direct connections and 1918 indirectconnections were identified. Table 3 summarizes the numberof direct and indirect relationships between an element andother elements leading into them (“in”) and higher orderelements connected to them (“out”) (Reynolds & Gutman,1988).

Then, a Hierarchical Value Map (HVM) was built (Fig. 1)by connecting the chains extracted from the implicationsmatrix. In doing this, consistent with previous research using asimilar number of respondents (Thompson & Chen, 1998), acut-off level of three relationships was established: all con-nections below this level were ignored. Of note is that “thereare no theoretical or statistical criteria to guide the selection ofthe cutoff level” (Grunert & Grunert, 1995, p.221). Since there

Fig. 2. a: First dominant chain. b: Second dominant chain. c: Third dominant chain. d: Fourth dominant chain.

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is a tradeoff between comprehensiveness and parsimony(Bagozzi & Dabholkar, 2000), a compromise is neededbetween retaining information and creating a manageablemap. This process requires a lot of ingenuity, heuristics or apatient trial-and-error approach (Reynolds & Gutman, 1988).The only guidelines suggested when constructing an HVM arethe following: “one should try at all costs to avoid cross lines”(Gutman, 1982, p.65) on the maps for the benefit ofinterpretability. Secondly, all concepts should be mentionedby at least 5% of the respondents (i.e. two managers, in ourcase) (Gengler, Klenosky, & Mulvey, 1995; Klenosky et al.,1993). Thirdly, the most relevant criteria in establishing howeffective the map is in representing the data is to assess thepercentage of all relationships among elements accounted forby the mapped elements (Reynolds & Gutman, 1988). Thetypical threshold value here is 70% (Gengler & Reynolds,1995). Our final choice met all these requirements, since thefinal HVM has very few cross-lines. The map includes onlythose concepts cited by at least 7 of the 33 respondents: thefinal attributes, consequences and values account respectivelyfor 86.2%, 92.5% and 89.8% of total attributes, consequencesand values cited by respondents. Finally, the HVM incorpo-rates 69.7% of total connections.

The map in Fig. 1 depicts attributes, consequences andvalues in different ways. The “n” inside the circles indicates thenumber of respondents who cited that concept. The relativestrength of association between concepts is represented by thewidth of the connecting lines.

In line with relevant literature (Dewsnap & Jobber, 2000;Leenders & Wierenga, 2002; Maltz & Kohli, 2000; Rouziès etal., 2005), the 11 attributes finally used refer to differentorganizational elements: culture/strategy, structure, processesand managerial systems.

The 18 consequences retained include both psycho-socialbenefits (e.g. trust, commitment, motivation, perception ofpositive climate) (e.g. Dewsnap & Jobber, 2002) and functionalbenefits (e.g. better decisions, better implementation) (e.g.Cespedes, 1993; Rouziès et al., 2005), thus confirming thefindings of the preliminary study. These consequences provide adetailed picture of different components of the “integration”construct to be discussed later.

The final six values refer to distinct although related entities:customers (customer satisfaction), the company (success,corporate image) and its employees (employee satisfaction).

Consistent with other studies (e.g. Thompson & Chen, 1998;Van Rekom et al., 2006), we decided to present both thecomplete HVM and the dominant chains separately. Thecomplete HVM is drawn for purposes of analysis. It is highlyinformative but is also complex. The dominant chains are drawnfor purposes of presentation, since they help clarify and betterunderstand the connections among the key variables.

The complete HVM incorporates 52 different attribute–consequence–value chains. By analyzing both their length andthe sum of links (direct and indirect) they incorporate, it ispossible to identify the dominant chains (Aurifeille & Valette-Florence, 1995; Gengler et al., 1995). Noteworthy is the factthat all dominant chains (Fig. 2a,b,c,d) incorporate the concept

of communication. The first dominant chain is: communica-tion–confrontation–better market knowledge–broader perspec-tive–better decisions–company success. Similarly, the seconddominant chain follows this path: communication–sharing ofstrategies and plan–consistency and synergies–better deci-sions–company success. A third chain includes: communica-tion–understanding the counterpart–helping the counterpart–solving problems–increased customer satisfaction. Lastly, afourth dominant chain follows the sequence: communication–collaboration–commitment–motivation–positive climate–em-ployee satisfaction.

5. Discussion

5.1. The nature of Marketing–Sales integration

Previous research suggests that integration is a combinationof interaction and collaboration (Kahn, 1996, 2001). In keepingwith Dewsnap and Jobber (2000) and Rouziès et al. (2005) ourfindings highlight a more articulated nature of the integrationconstruct. Communication and collaboration emerge as twocomponents of the construct, whereas trust, motivation,commitment, mutual help, reduced inter-group conflict andpositive organizational climate play a role as well. Communi-cation appears as the central node in the network of conceptsrepresenting integration. Our findings reinforce the fact thateffective communication between Marketing and Sales yieldsmany positive outcomes including: stimulating confrontation,mutual understanding, collaboration and sharing. These, in turn,foster increased effectiveness and efficiency of market knowl-edge development and decision making, while supporting anorganizational climate based on trust and cooperation, confirm-ing prior research on Marketing interfaces with other functionalunits (Fisher et al., 1997; Kahn, 2001; Maltz & Kohli, 1996).

However, earlier research has yet to fully analyze therelationship between interaction and collaboration consideringthem as independent components of integration. Conversely,our results indicate that interaction – obtained through meet-ings, exchange of documents, use of ICT, etc. – brings aboutcollaboration, so that its role as antecedent of collaborationmight be advanced. Other findings suggest that the definition ofintegration referred only to marketing and sales activities(Rouziès et al. 2005) is too limited. Respondents, in fact, alsomention sharing of goals and resources and sharing of strategiesand plans, giving emphasis to the fact that integration can beachieved at different organizational levels: from bottom-lineactivities to strategic decision-making and long-term invest-ments decisions.

5.2. Marketing–Sales integration and marketing capabilities

An analysis of the dominant chains of the HVM providessome insight into the contribution integrating the two depart-ments has on the development of marketing capabilities.

The first dominant chain (Fig. 2a) suggests that marketsensing and market based generative learning are enriched. AsDay (1994b) suggests, continuous learning about markets

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requires widespread information distribution and mutuallyinformed mental models. Increased communication betweenMarketing and Sales helps ensure the confrontation of differentthought worlds so that mental models of both parties arechallenged and functional oversimplification of market repre-sentations can be avoided. Moreover, by dismantling thesystematic or structural constraints on information flowsbetween the two departments, shared interpretation of informa-tion can emerge bringing about generative learning. Generativelearning is different from adaptive learning (Senge, 1990;Sinkula, 1994; Slater & Narver, 1995) in so far as the latteroccurs within the actual knowledge base of the organization,whereas the former challenges long-held beliefs allowing theorganization to have a broader perspective about its markets. Asa consequence, generative learning improves the effectivenessof marketing decisions contributing to company success via theability to sense and anticipate future market trends ahead of itscompetitors (Day, 1994a; Weerawardena, 2003b).

The second dominant chain (Fig. 2b) suggests thatMarketing–Sales integration contributes to market-based adap-tive learning and customer linking. In fact, increased commu-nication allows both parties to create a common vision of themarket and strategies as well as plans are therefore sharedaccordingly (Kahn, 2001; Slater & Narver, 1995). Improvedalignment between the two functions fosters efficient decision-making processes by means of heightened consistency andsynergy. This evidence is strengthened by prior research oncustomer relationship management, where the positive effect ofintegrated interfunctional efforts for strategic account manage-ment (Workman et al., 2003) and relationship selling (Weitz &Bradford, 1999) is emphasized. The customer linking capabil-ity, as discussed in Day (1994a), suggests that improvementscan be developed by means of cross-functional Marketing–Sales coordination and information sharing that focuses on acommon vision as to which customers to serve and whichquality standards to provide. The ability to create long-lastingrelationships with customers depends on the consistency ofmarketing and sales strategies as well as objectives along theproduct life cycle (Strahle et al., 1996) and the coordination ofcommunication and promotional investments/strategies(Cespedes, 1993).

The third dominant chain (Fig. 2c) displays anothercontribution of Marketing–Sales integration to marketingcapabilities. As suggested by Kahn and colleagues (Kahn,1996, 2001; Kahn & Mentzer, 1998), communication andmutual understanding are two main components of interde-partmental integration. Our findings suggest that Marketing–Sales integration generates customer value by means ofincreased organizational citizenship (see Podsakoff, MacK-enzie, Paine, & Bachrach, 2000, for a review). In fact, helpingbehavior is a type of citizenship behavior, defined as“voluntarily helping others with, or preventing the occurrenceof, work-related problems” (Podsakoff et al., 2000: 516). Asposited in prior research on the topic, organizationalcitizenship behavior enhances customer satisfaction bystimulating constructive suggestions about how to improvea company's value proposition (Waltz & Niehoff, 1996).

Again, this is yet another example of the contribution ofMarketing–Sales integration to the development of marketsensing capabilities. Several studies demonstrate that theintegration of salespeople in marketing decision-makingcontributes to an increased organizational effectiveness insolving customer problems and enhancing customer satisfac-tion. Good examples of this are provided by Lambert,Marmorstein, and Sharma (1990), who focus on thefundamental role played by the sales force in getting infor-mation from the market, von Hippel (1989), who emphasizesthe insights that salespeople get by interacting with leadusers, and Weitz and Bradford (1999), who claim the need toinvolve the Sales department in decisions regarding customerservice since part of this service is actually provided by thesales force.

The fourth dominant chain (Fig. 2d) shows that integrationbetween Marketing and Sales departments fosters the creationof an organizational climate typical of learning organizations,hence giving more emphasis to the market-based learningcapability contribution. In fact, as suggested by Slater andNarver (1995), learning organizations are characterized byorganic structures (cf. Burns & Stalker, 1961), whose mainfeatures are: recognition of interdependence, informationsharing, cooperation and commitment. Studies on marketorientation (Jaworski & Kohli, 1993; Kohli & Jaworski,1990) posit that the typical processes of market orientedcompanies – e.g. effective marketing intelligence disseminationand organizational responsiveness – have a positive impact onemployee satisfaction. Our findings confirm this theory.Similarly, research on procedural justice in organizations (seeKonowsky, 2000 for a review) also provides support for ourfindings. In fact, communication and collaboration are per-ceived to be opportunities to increase informational justice(Greenberg, 1993) – that is, provide adequate explanationsrelated to decisions made – a component of procedural justice.Prior research (Konowsky, 2000) suggests that perceptions ofprocedural justice strongly impact commitment and trust, and,as a consequence, employee satisfaction. Therefore, again,Marketing–Sales integration contributes to the creation of anorganizational context supporting market-based organizationallearning.

5.3. Antecedents and consequences of Marketing–Salesintegration

The literature highlights the importance of integrationmechanisms to reduce intra-organizational conflicts and achieveinterdepartmental integration (e.g. Maltz, 1997; Maltz & Kohli,2000; Rouziès et al., 2005), but an empirical examination ofhow these mechanisms function in Marketing–Sales relation-ships is almost non-existent. Our study begins to shed somelight on this topic, hopefully contributing to “a betterunderstanding of the social psychological determinants andeffects of relations between Marketing and Sales [which] willlead managers to design and institute organizational designs andhuman resources policies so as to minimise any negative inter-group effects” (Dewsnap & Jobber, 2002: 875). Findings show

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that different integrating mechanisms have differential effectson specific integration components. For example, job rotationimpacts mutual understanding (a component of collaboration),whereas training and organizational structure impact mutualunderstanding and communication albeit differently.

As for the consequences of Marketing–Sales integration ourfindings begin making progress on the managerial perceptionsof customer value creation to some extent. Customer valuecreation is interpreted by respondents as the ability to solvecustomer problems by means of better knowledge and a broaderperspective of the market, which allow companies to makebetter decisions and innovate. Marketing–Sales integrationemerges as a company key capability contributing to thegeneration of customer value. These findings broaden generaldefinitions of customer value such as the customer's percep-tions of the benefits enjoyed versus costs incurred in buyingproducts or, more simply, what you get for what you pay (e.g.Ulaga, 2001; Ulaga & Chacour, 2001; Walter, Ritter, &Gemünden, 2001). In fact, they suggest that customers valuethe seller firm's flexibility and responsiveness (e.g. Lapierre,2000) and anticipate expectations about future performance ofthe relationship (Ravald & Grönroos, 1996), hence theperceived supplier's ability to innovate also plays a veryrelevant role.

6. Implications

6.1. Theoretical implications

The present study is one of the very few empiricalinvestigations on Marketing–Sales integration. As such itmakes a number of theoretical contributions. The firstcontribution is to better specify the nature of the Marketing–Sales integration construct. Our findings may be used in futureresearch on how to better implement and measure theintegration construct, or on how to improve model causalpaths between different facets of integration. In fact, the resultthat emerges from our data is that the construct is multi-facetedand encompasses many more interrelated components thanthose traditionally considered in the literature on cross-functional relationships (Kahn, 1996, 2001). An additionalimplication regarding the nature of the construct is that a betterunderstanding may encompass not only the integration ofmarketing and sales activities, but also the integration ofstrategies, resources and investments.

One important theoretical implication of our study is aclearer understanding of the relationship between marketingcapabilities and Marketing and Sales integration. Notwithstand-ing the emphasis made by prior research on marketingcapabilities to the integrative role of those capabilities (Day,1994a; Vorhies, 1998), a validated work on how integrationfunctions is missing. The results of our study suggest thatMarketing–Sales integration contributes to the development ofseveral marketing capabilities: market-based organizationallearning, market sensing and customer linking. In fact,interdepartmental communication, collaboration and confron-tation allow members of the two departments to challenge their

long-held mental models and support generative marketlearning. Moreover, sharing strategies and plans allows theorganization to develop adaptive market learning, gainingefficiency and consistency in marketing decision-making. This,in turn, brings about an improved ability to design a valueproposition able to better satisfy customer expectations. On amore general level, other components of Marketing–Salesintegration, like commitment, motivation and trust, helpgenerate an organizational climate typical of a learningorganization (Li & Calantone, 1998; Senge, 1990; Slater &Narver, 1995).

Another important theoretical implication of our studyregards the relationship between Marketing–Sales integrationand certain organizational variables like citizenship behaviorand procedural justice. To our knowledge, ours is the first studyto consider these relationships and hopefully will inspire furtherdebate on the topic. Information sharing, confrontation andmutual understanding foster citizenship behavior – e.g. helpingbehavior – as well as the perception of procedural justice. Priorliterature on citizenship behavior (Podsakoff et al., 2000) andprocedural justice (Konowsky, 2000) posit a significant positiveimpact of these variables on organizational effectiveness andperformance. Therefore, the relationship between Marketing–Sales integration and the creation of superior customer valuecreation is also mediated by some characteristics of theorganizational context.

6.2. Managerial implications

In terms of managerial implications, an important contribu-tion of this study regards integrating mechanisms. Prior researchon interdepartmental integration (Dewsnap & Jobber, 2000;Leenders & Wierenga, 2002; Maltz & Kohli, 2000; Rouziès etal., 2005) argues that systems supporting information flows andcollaboration between the two functions positively affect theirintegration. Our findings suggest that integration componentsexceed interaction and collaboration in a way that may alsoaffect elements like organizational climate, mutual trust,motivation and commitment. This suggests that some mechan-isms are able to affect the various components of integration indifferent ways. As a result, the adoption of different integratingmechanisms calls for a clear understanding of their effects. Sucheffects can be interpreted in terms of cognitive, affective andbehavioral responses of marketing and sales personnel, whichshould be regularly monitored. Secondly, starting from this in-depth understanding, companies should identify likely intra-organizational differences in such responses, try to reduce (ifnot eliminate) these differences, reinforce positive associationsand work against negative associations.

An additional managerial implication regards the organiza-tional effects of integration between Marketing and Salesdepartments. Contemporary managerial literature emphasizesthe importance of cross-functional teams for the effectiveness ofmany organizational processes – e.g. customer order fulfill-ment, new product/service development, customer servicedelivery. Our findings suggest that managers can utilizeinterdepartmental integration to also improve citizenship

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behavior and the perception of procedural justice with theconsequent beneficial effect in terms of employee satisfactionand customer value creation.

The last managerial implication involves organizationalmarket orientation. Literature on market orientation has positedthe beneficial effect of it in terms of customer satisfaction andemployee satisfaction (Jaworski & Kohli, 1993; Slater &Narver, 1994). Our research provides some guidance tomanagers who wish to improve or redirect their organization'sorientation toward their markets. In keeping with Rouziès et al.(2005: 113), we argue that “Marketing and sales integration isone of the components of market-driven organizations”. In fact,the results of our study suggest that effective integrationbetween Marketing and Sales departments positively contri-butes to the generation and dissemination of marketingintelligence (Kohli & Jaworski, 1990) and to the creation ofan organizational climate supportive of a learning orientation(Li & Calantone, 1998; Slater & Narver, 1995).

In conclusion, the integration of Marketing and Salesdepartments is a capability in itself, whose development requiresthe ability to use appropriate mechanisms at different levels:organizational culture, organizational design, managerial systemsand communication technology and infrastructure.

6.3. Limitations and future research directions

The study presented here is clearly exploratory. As anyqualitative design, it has limitations in terms of whether it isconsidered replicable and hence legitimized in making general-izations of its findings. To achieve these objectives a cross-sectional survey should be designed and run. This survey wouldhelp confirm the multi-dimensionality of the integrationconstruct and analyze the relationship between its differentcomponents. Furthermore, a quantitative design would also helpmeasure the differential impact of various integrating mechan-isms on the different components. Such factors may beinvestigated at different levels: company culture, organizationstructure, processes/systems and personal characteristics of themanagers of the two functions (Dewsnap & Jobber, 2000;Langerak, 2001; Rouziès et al., 2005).

The consideration of factors affecting the optimal level ofintegration should also be welcome. In a sense, our studyimplicitly suggests that when considering integration mechan-isms, the relationship between them and the integration achievedis positive and linear. As prior research suggests with respect tosome mechanisms, this does not always hold true. For example,Maltz and Kohli (1996) found evidence of an inverted U-shaperelationship between communication and integration. Furtherresearch should investigate if a non-linear relationship may alsohold true for other integrating mechanisms.

Finally, in our study we have focused our attention onorganizational factors and we have not analyzed the differentialneed of Marketing–Sales integration resulting from theexistence of specific external variables. As argued by Ruekertand Walker (1987) different environmental and industryconfigurations may require different levels of integration.Thus, we suggest investigating the role played by the following

categories of variables: i) environmental variables (e.g. marketdynamism, environmental uncertainty, technology turbulence),ii) customers (e.g. concentration vs. fragmentation, demanduncertainty), iii) competitors (e.g. competition intensity,industry concentration, competitors' innovation strategies) andiv) company (e.g. size, strategic positioning, distinctivecapabilities, reliance on product or process innovation). Someof these variables may also act as moderators between the use ofintegration mechanisms and the resulting Marketing–Salesintegration. This aspect would, in our view, also warrant specialattention.

Acknowledgement

This study was partially supported by the Department ofMarketing and the Research Division of SDA Bocconi Schoolof Management. The authors thank the anonymous IMMreviewers for their help in greatly improving the article. Theyare also grateful to Prof. Sandro Fazzolari for his help in editingthe final version of the article.

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Paolo Guenzi is an Associate Professor of Marketing at Università L. Bocconiand SDA Bocconi School of Management, Milan, Italy. His main researchinterests include sales management, relationship marketing and servicesmanagement. His research has been published in the International Journal ofService Industry Management, European Journal of Marketing, Journal ofMarketing Management and International Journal of Sports Marketing andSponsorship.

Gabriele Troilo is an Associate Professor of Marketing at Università L.Bocconi and SDA Bocconi School of Management, Milan, Italy. His mainresearch interests include marketing knowledge management, marketingcapabilities and cross-functional integration. He is Vice President of theEuropean Marketing Academy.