Marketing Intelligence & PlanningMarketing strategy, contextual factors and performance: An investigation of theirrelationshipBishnu Sharma

Article information:To cite this document:Bishnu Sharma, (2004),"Marketing strategy, contextual factors and performance", Marketing Intelligence &Planning, Vol. 22 Iss 2 pp. 128 - 143Permanent link to this document:http://dx.doi.org/10.1108/02634500410525823

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Marketing strategy, contextualfactors and performance

An investigation of their relationshipBishnu Sharma

University of the Sunshine Coast, Maroochydore DC, Australia

Keywords Marketing strategy, Organizational performance, Australia,Manufacturing industries

Abstract This research investigates the degree of emphasis put by the Australian manufacturingindustry on marketing strategy, along with other organisational strategies such as research anddevelopment (R&D), human resources, technology, operations at the functional level. The studyfound that the emphasis on marketing strategy had a third place after operations and R&Dstrategy in the past few years. In terms of its effectiveness, marketing strategy has not been aseffective as the operations strategy and the technology strategy. The research also investigates therelationship between marketing strategy and organisational performance. The results suggest thatthe increase in efforts for the development of new market segments/customers is found to bepositively associated with the increase in sales growth in domestic and export markets. It is alsofound that market forecasting has a positive and significant relationship with the return on totalassets while the development of new market segments/customers and market share analysis have anegative and significant relationship. The research extends further to investigate whether theemphasis on marketing strategy differs with contextual factors such as firm size, firm’s genericstrategy, type of market, firm’s life cycle stage, etc. The findings suggest that relatively higheremphasis was placed on the marketing strategy by firms which are large, are involved in consumergoods industry, are involved in exports, have high domestic sales growth, and have adopted adifferentiation strategy combined with a cost leadership strategy. In conducting this study, a mailsurvey was carried out to collect information from manufacturing firms across Australia, and 225responses were received. This was followed by an on-site interview of some of the senior managersof manufacturing firms in Adelaide, Melbourne and Sydney.

IntroductionWith the growing competition in the domestic and international markets, moredemanding and assertive customers, rapid advancement in technology, andchanging government policies and laws, the marketing environment haschanged dramatically in the last decade and is becoming more turbulent(Cravens et al., 2000; Jain, 1997). Cravens (2000) argued that marketing is amajor stakeholder in new product development, customer management, andvalue/supply-chain management, and marketing strategy provides conceptsand processes for gaining a competitive advantage by delivering superior valueto the business’s customers. Therefore, to deal with the current challenges, thebusinesses must have more distinctive and purposeful marketing strategiesand they should be effectively implemented (Cravens et al., 2000). E-commerceat present has become a popular marketing strategy and it has eliminated someof the activities in the value chain and helped improve business performance

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

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Marketing Intelligence & PlanningVol. 22 No. 2, 2004pp. 128-143q Emerald Group Publishing Limited0263-4503DOI 10.1108/02634500410525823

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(Cotter, 2002). For example, Dell Computer used a business model of sellingdirectly which eliminated a step in the value chain and other PC makers alsowere then forced to revamp their value chain approach (Crosby and Johnson,2002; Thompson and Strickland, 2001).

Literature also suggests that companies that compete effectively on time(speeding new products to market, manufacturing just in time, respondingpromptly to customer complaints) tend to be good at other business attributes.Some of those business attributes include assessment of customerrequirements, product quality consistency, ability to exploit emergingmarkets, enter new businesses, generate new ideas and incorporate them ininnovations (Stalk et al., 1992). Intensive market knowledge (goodunderstanding of customers, competitors and the market environment) isconsidered to be one of the key approaches to low cost production andefficiency improvement (Dodgson, 1989; Storey, 1994). Buzzell et al. (1975)identified six factors for the business competitiveness. They are marketingeffort, relative product quality, research and development, product innovation,relative service quality and product availability. The most powerful of theseare marketing expenditure, relative product quality and level of innovation(Buzzell et al., 1975). According to Zairi (1994), the key elements ofcompetitiveness include the “voice of the customer through current and futuredemands and the voice of the process through establishing the organisationalcapability to deliver customer wants”.

In the context of changing customer expectations, technologicaldiscontinuities, increasing environmental uncertainties, business managershave a big challenge of making the right strategic choice and setting theirstrategic priorities in order to allocate their resources to different functions inan efficient manner for business success. This view is consistent with the viewsof Bettis and Hitt (1995), who argued that managers must develop new tools,new concepts, new organisation and the new mindsets to cope with theturbulent and chaotic environments leading to discontinuous change. DeloitteTouche Tohmatsu’s (1994) study revealed that customer service and qualityare viewed as the top priority critical success factors by the Australianmanufacturing industry for the immediate future. This study also reported thatAustralasia and Europe fall behind the USA, Canada, and Japan in their abilityto complement their own capabilities through integration with customers andsuppliers. Australia’s poor industrial performance has been a matter ofincreasing concern (Dwyer and Mellor, 1993). Failure to adopt appropriatestrategies to deal with competition could lead to the deterioration of businessperformance (Mia, 1996).

Gilbert and Strebel (1988) suggested that different industries offer differentopportunities and, as a result, successful strategies differ from one industry toanother. Strategic choice, therefore, depends on a particular situation(Hambrick, 1983). Importance of different organisational functions at

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different product life cycle (PLC) stages was discussed by Fox (1973).Consequently, he argued that different strategies may be needed at differentPLC stages. For example, market success with each product can be achieved ifthe R&D function is emphasised in the introduction stage, production in thegrowth stage, marketing in the maturity stage and finance in the decline stage.The study of Snow and Hrebiniak (1980) showed significant relationshipsamong business level strategies, certain functional areas and performance. Thestudy of Lawrence and Lorsch (1967) found that the importance placed onmarketing had more influence on firm’s performance than in production in bothfood processing firms and container packaging firms, whereas their study didnot show any relationship in the plastic industry.

In summary:. marketing strategy has been regarded as having a pivotal role in

enhancing business performance;. e-commerce has revolutionised the way business is being done in today’s

competitive environment;. level of emphasis on organisational functions is contingent on business

strategy, product life cycle stage and other situational factors;. there is a growing concern for poor performance of Australian businesses;

and. there is an increasing recognition of the need to integrate marketing

strategy with business strategy.

Research questionsTo address the issues summarised above, this research aims to investigate thefollowing exploratory research questions in the context of Australianmanufacturing industry:

(1) What is the level of emphasis put by the Australian manufacturingindustry on marketing strategy?

(2) How effective has marketing strategy been in the Australianmanufacturing industry?

(3) Is marketing strategy associated with organisational performance?

(4) Does the emphasis on marketing strategy differ with contextual factorssuch as firm size, PLC stage, type of goods, market type, industrycategory, etc?

Contextual factors and marketing strategyFirm sizeDifferent organisations have developed different definitions for firm size. Thefollowing definitions have been used for this study:

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. Small size – less than 100 employees or less than $25 million in totalassets/or sales.

. Medium size – between 100 and 250 employees or $25-100 million in totalassets/or sales.

. Large size – more than 250 employees or more than $100 million in totalassets/or sales.

PLC. PLC has been measured in terms of introduction, growth, mature, anddecline stages.

Type of goods produced. If the goods produced by the firm are sold in the retailmarket then the goods produced are consumer goods, and if the goods producedare sold from one business to another business then the goods produced areindustrial goods. Some firms, however, get involved in the production of bothconsumer and industrial goods.

Market type. The firms which are not exporting sell their products in thedomestic markets and those which export sell their products in theinternational markets. Therefore, the market type is classified into twocategories, namely domestic and export markets.

Industry category. The following industry categories are considered – food,textile, wood and paper, printing, chemical, non-metallic, metal, machinery andequipment, and other.

Porter’s (1980) generic strategies:. cost leadership strategy is a business strategy which emphasises

organisational efficiency so as to achieve cost advantage relative tocompetitors;

. differentiation strategy is a business strategy which seeks to developproducts or services viewed as unique in the industry;

. focus strategy is a business strategy which attempts to establish aposition of cost leadership or differentiation or both within a particularsegment of a market;

. stuck in the middle are the combined strategies.

Functional strategies. Seven key organisational functions have been identifiedbased on a review of past research work (Hitt et al., 1982; Steiner, 1969). Theyare marketing, research and development (R&D), technology, operations,human resources (HR), financial, and organisational. Distinctive competenciesrelevant to each functional area have been identified in defining thesefunctional strategies. These functional strategies are defined as follows.

. Marketing strategy aims to improve the operational performance throughthe use of sub-strategies such as after-sales service improvement,specialised delivery arrangements, development of new market segmentsand/or customers, market forecasting, and market share analysis.

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. R&D strategy aims to improve the operational performance through theuse of sub-strategies such as competitive comparisons, productimprovement, new product development, substitute product analysis,and product enhancements.

. Technology strategy aims to improve the operational performancethrough the use of sub-strategies such as in-house development oftechnology, acquisition of new technology, use of flexible manufacturingsystems (FMS), use of computer numerical control (CNC) machines, anduse of computer integrated manufacturing (CIM).

. Operations strategy aims to improve the operational performance throughthe use of sub-strategies such as cost reduction programs, labourreduction, continuous process improvement, scrap or waste reduction,and cycle time reduction.

. Human resources (HR) strategy aims to improve the operationalperformance through the use of sub-strategies such as staff motivationprograms, multi-skilling, staff career path planning, education and skillsupgrading, and increased employee participation.

. Financial strategy aims to improve the operational performance throughthe use of sub-strategies such as specialised billing arrangements, use ofelectronic data interchange (EDI) systems, capital restructuring, andactivity-based costing.

. Organisational strategy aims to improve the operational performancethrough the use of sub-strategies such as organisational restructuring,process re-engineering, change from functional to divisional structure,horizontal integration, and vertical integration.

Theoretical frameworkA schematic diagram of the theoretical framework of this research is shown inFigure 1. The framework assumes that the emphasis on functional strategies isinfluenced by contextual factors such as the firm’s industry, type of goodsproduced, PLC stage, firm size, market type, etc. The framework also assumesthat the choice of strategies at functional level should have a match with thebusiness strategy chosen by the firm, as suggested by Hrebiniak (1990). It isalso assumed that businesses are aware of the appropriateness of theorganisational structure, the people and the culture to implement the chosenstrategies. The framework also depicts that the right strategic choice at thefunctional level may lead to improved business performance.

MethodSample and the target respondentsA mail survey of manufacturing industry was conducted across Australia.Chief executive officers (CEOs) were requested to complete the questionnaire as

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the task of formulating strategy, making long range plans and implementingthe strategies is their major responsibility (Aguilar, 1967; Gopinath andHoffman, 1995; Hambrick and Mason, 1984). The sample was selected so thatsmall, medium, and large manufacturing firms were represented. Thepurposive sampling technique was used in selecting a sample for thisresearch. Interviews of CEOs or senior managers in Sydney, Melbourne andAdelaide were conducted for developing an understanding of practical aspectsof strategy formulation and adoption and validating the study findings.

Scales and measurementThe generic strategies, PLC stage, type of goods produced and industrycategory were measured on a nominal scale. For measuring the strategic focusat functional level, scales were developed and 34 strategic variables relevant toorganisational functions were listed in random order. The level of past use andfuture emphasis on strategic variables was measured using a seven-pointrating scale. The respondents were also asked to indicate whether any of thosestrategic variables had been very effective in the past. Pre-testing of thequestionnaires was completed before the survey was sent.

Sample representativenessTo confirm the representativeness of the respondents, a check ofnon-respondents was carried out and some of the organisational attributessuch as industry category, type of market, number of employees, etc. werecompared with the attributes of the respondents. The chi-square test revealedno significant differences in any of these characteristics between therespondents and non-respondents.

Figure 1.Theoretical framework

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Reliability and validityFor testing the instrument reliability a reliability index (Cronbach’s coefficient)was used. The a reliability calculated for different functional strategies rangedfrom 0.67 to 0.88. The a value for marketing strategy is 0.73. These figuressuggest strong evidence of reliability in the constructs of functional strategiesbased on the comparison of a values with past studies (Hitt et al., 1982). Thecorrelation analyses were carried out between the subjective and objectivemeasures of performance such as market share and profitability to test thevalidity. The results provided an evidence of validity.

Use of statistical techniquesStatistical techniques such as factor analysis, descriptive analysis, correlationanalysis, linear regression, and analysis of variance (ANOVA) were used foranalysing the data.

ResultsSurvey responses and profile of respondentsAltogether, 225 usable responses were received from the survey. The overallresponse rate was 11.4 per cent, which compares favourably with the responserates of McDougall et al. (1994) at 11 per cent, and Koch and McGrath (1996) at6.5 per cent. Two-thirds of these useable questionnaires were completed by theCEO or managing director or general manager or director, and the remainingquestionnaires were completed by senior level managers dealing with afunctional area of the organisation such as marketing, operations, finance,human resources, etc. In terms of firm size, 43.6 per cent of respondentsemployed less than 100 people (small), 28.9 per cent employed between 100 and250 people (medium), and the remaining 27.5 per cent employed more than 250people (large). In terms of annual sales, nearly 50 per cent of the respondentshad annual sales less than $25 million. Another 28.6 per cent had sales between$25 and $100 million. The remaining 21.4 per cent had sales of $100 million andmore. In terms of total assets, nearly 65.8 per cent of the respondents had totalassets value under $25 million. The next 23.3 per cent had total assets between$25 and $100 million; 54 per cent of respondents produced industrial goods,24.6 per cent produced consumer goods and the remaining 21.4 per centproduced both consumer and industrial goods.

In terms of PLC stage, 66.2 per cent of the respondents were at the maturestage, 26.9 per cent at the growth stage, 3.7 per cent at the introduction stageand the remaining 3.2 per cent at the decline stage. Average return on assets(ROA) of the survey respondents was 16.5 per cent per annum; 42 per cent ofthe respondents indicated a ROA under 10 per cent, the next 30.3 per centindicated a ROA between 10 and 20 per cent and the remaining 27.7 per centindicated a ROA over 20 per cent; 78.7 per cent of respondents were involved inexports. The average proportion of sales being exported was 15 per cent. About

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half of the exporters had exports less than 5 per cent of sales. Generally, therespondents were found to be keen in enhancing their exports, which isindicated by the average annual export sales growth of 27 per cent against anaverage annual domestic sales growth of 14 per cent.

The findings for each of the research questions are presented in thefollowing sections.

Response to research questions 1 and 2 – the level of emphasis put by theAustralian manufacturing industry on marketing strategy and its effectiveness.The mean scores for the level of past use and future emphasis were calculatedfor each functional strategy using their respective constructs (strategicvariables) as defined earlier. The scale used for the measurement of past usewas “1 ¼ not used at all to 7 ¼ highly used” and that for future emphasis was“1 ¼ no emphasis at all to 7 ¼ high emphasis”. The scores for the pasteffectiveness of functional strategies including marketing strategy werecalculated in the following manner – number of respondents answering veryeffective for each strategic variable were added under each functional strategyas defined and the mean scores were calculated. The results on the level of pastuse for each functional strategy, their anticipated future emphasis and theirpast effectiveness are summarised in Table I.

The results (Table I) suggest that marketing strategy ranks the thirdposition from the top in the past in terms of its use followed by HR strategy,technology strategy, organisational strategy and financial strategy. Operationsstrategy was accorded the highest importance followed by R&D strategy.Although there seems to be an increase in overall emphasis in marketingstrategy in future, the ranking of its importance will still continue to be thesame as in the past few years. Operations strategy will be a number onepriority, but human resources will receive the second top priority in future.However, in terms of effectiveness in the past, marketing strategy was notfound very effective as it ranked number five in spite of relatively highimportance given to marketing efforts.

Past use Future emphasisPast

effectivenessFunctional strategies Mean SD Ranking Mean SD Ranking Scores Ranking

Operations 4.63 1.25 1 5.24 1.10 1 36.6 1R&D 4.23 1.07 2 4.91 1.02 4 19.8 4Marketing 4.22 1.22 3 5.02 1.20 3 15.0 5Human resources 4.20 1.38 4 5.19 1.13 2 21.6 3Technology 3.74 1.34 5 4.30 1.27 5 22.4 2Organisational 3.36 1.31 6 3.81 1.35 7 6.6 7Financial 3.14 1.39 7 3.91 1.34 6 8.8 6

Note: For past use and future emphasis mean scores, standard deviation and the ranking areindicated. For past effectiveness, the mean scores and the ranking are indicated

Table I.Functional strategies –

the level of past use,future emphasis and

past effectiveness(n ¼ 225)

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Operations strategy was number one in terms of its effectiveness. This gives aclear indication that there was a need to reduce the cost for Australianmanufacturing industry to be more competitive. It can also be observed thattechnology strategy, although it did not receive much importance in its use,was very effective in the past with number two spot in its ranking. This isperhaps because of the use of technology in cost reduction efforts as a part ofoperations strategy.

An analysis of individual strategic variables under marketing strategysuggests that the Australian manufacturing industry has given more emphasison the development of new market segments/customers. This is then followedby after-sales service, market forecasting, market share analysis, andspecialised delivery arrangements (Table II). It is also noted that the topthree marketing strategies – development of new market segments/customers,after-sales service improvement, and market forecasting share analysis – havebeen very effective in the past. Market share analysis has been found to be leasteffective.

Table III shows the ranking of strategic variables by business level genericstrategies adopted by firms. This analysis suggests that after-sales service hasbeen the most important strategy, irrespective of cost leadership ordifferentiation or focus generic strategy.

Response to research question 3 – the relationship between marketingstrategy and organisational performance. The correlations among marketrelated strategy variables and objective measures of organisationalperformance such as export proportion, sales growth in domestic and exportmarkets, domestic market share and profitability (return on total assets) arepresented in Table IV. The results indicate that the correlations are generally

Past use Future emphasisPast

effectivenessMarketing strategy Mean SD Ranking Mean SD Ranking Scores Ranking

Development of newmarket segments/customers 4.57 1.74 1 5.54 1.36 1 30 1After-sales serviceimprovement 4.42 1.63 2 5.34 1.58 2 15 2Market forecasting 4.38 1.72 3 5.19 1.64 3 12 3Market share analysis 4.03 1.88 4 4.80 1.81 4 8 5Specialised deliveryarrangements 3.72 1.80 5 4.21 1.93 5 10 4Mean score formarketing strategy 4.22 1.22 3 5.02 1.20 3 15 5

Note: For past use and future emphasis mean scores, standard deviation and the ranking areindicated

Table II.Marketing strategy andstrategic variables –past use, futureemphasis and pasteffectiveness (n ¼ 225)

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weak and very few of them are significant. Development of new marketsegments/customers shows a positive and significant correlation with salesgrowth in domestic and export markets. This suggests that the increase inefforts for the development of new market segments/customers is positivelyassociated with the increase in sales growth in domestic and export markets.Multiple regression analyses are carried out to investigate the level ofexplanatory power of these marketing variables with objective performance(Table V). The results suggest that the coefficient of determination (R 2) ingeneral is very low. For example, 9.3 per cent of change (R 2¼0.093) in returnon total assets is explained by these marketing strategy related variables. Thisanalysis indicates that market forecasting has a positive and significantrelationship with the return on total assets while the development of new

Cost leadership(n ¼ 41)

Differentiation(n ¼ 43) Focus (n ¼ 29)

Marketing strategy Mean SD Ranking Mean SD Ranking Mean SD Ranking

After-sales serviceimprovement 4.34 1.62 1 4.91 1.31 1 4.21 1.57 1Development of newmarketsegments/customers 4.24 1.84 2 4.53 1.69 3 4.07 1.99 2Market forecasting 4.05 1.82 3 4.56 1.62 2 4.03 1.64 3Market share analysis 4.00 2.10 4 4.14 1.95 4 3.62 1.72 4Specialised deliveryarrangements 3.68 1.81 5 3.79 1.89 5 2.97 1.82 5Mean score formarketing strategy 4.06 1.27 2 4.39 1.02 2 3.78 1.13 4

Note: The numbers represent mean scores, standard deviation and ranking

Table III.Level of emphasis on

marketing relatedstrategic variables by

generic strategyadopted

Marketing strategyvariables

Proportionof exports

(%)

Sales growth indomesticmarket

(%)

Sales growthin exportmarket

(%)

Domesticmarketshare(%)

Return ontotal

assets(%)

After-sales serviceimprovement 20.060 0.076 0.141 0.027 20.140Market forecasting 0.056 0.082 0.137 0.020 0.044Development of newmarketsegments/customers 0.057 0.160* 0.246** 20.103 20.151*Market share analysis 20.007 0.095 0.132 0.002 20.133Specialised deliveryarrangements 0.039 0.055 20.031 0.066 20.072

Notes:*p , 0.05; **p , 0.001

Table IV.Correlation coefficients

(“r” values) – marketingstrategy related

variables andorganisational

performance

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market segments/customers and market share analysis has a negative andsignificant relationship. This suggests that the initiatives for the developmentof new market segments/customers and market share analysis involvesubstantial amounts of expenditure. A similar analysis using sales growth inexport markets as the dependent variable indicates a positive relationshipbetween the development of new market segments/customers and sales growthin export markets (R 2¼0.067), although the explanatory power in both cases isvery small.

Response to research question 4 – the impact of contextual factors such asfirm size, product life cycle stage, type of goods, market type, industry category,etc. on marketing strategy. Strategic focus by firm size has been analysedconsidering the number of employees as a measure of firm size. ANOVA hasbeen carried out using LSD (t-test) for testing the significance of differences inmean scores of marketing strategy (Table VI). The results suggest that thefocus on marketing strategy is significantly higher in large size firms thansmaller firms. Further analysis carried out to investigate the difference instrategic focus at marketing function with PLC stage suggests that the lifecycle stage does not have any influence in marketing strategy. It is also foundthat the firms that manufacture consumer goods, or both, emphasise thesestrategies relative to those that produce industrial goods only. Because ofhigher competitive pressure at the retail level for firms manufacturingconsumer goods, they have to put relatively more emphasis on marketingstrategy. Industrial goods, on the other hand, have a different marketing set-up

Marketing strategyvariables

Proportionof exports

(%)

Domesticmarketshare(%)

Sales growthin exportmarket

(%)

Sales growth indomesticmarket

(%)

Return ontotal

assets(%)

After sales serviceimprovement 20.031 0.104 0.094 0.054 20.029Market forecasting 0.124 0.065 0.005 0 0.290***Development of newmarketsegments/customers 0.067 20.144* 0.209** 0.135* 20.163**Market share analysis 20.074 0.003 0.035 0.058 20.214**After-sales serviceimprovement 20.096 20.094 20.048 20.062 20.142

Multiple R 0.156 0.147 0.260 0.176 0.305R 2 0.024 0.022 0.067 0.031 0.093SE 17.37 24.99 47.66 27.94 16.47F 1.07 0.84 2.63** 1.30 3.71***

Notes: *p , 0.10; **p , 0.05; ***p , 0.01

Table V.Relationship betweenmarketing strategyvariables andorganisationalperformance (results ofmultiple regressionanalysis “standardisedcoefficients 2 bvalues”) 2 objectivemeasures

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Notes:

Th

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per

scri

pts

a,b

,c,d

,ed

enot

esi

gn

ifica

nt

dif

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nce

sin

mea

ns.

*p,

0.10

;**p,

0.05

;**

*p,

0.00

1

Table VI.Test of difference in thelevel of use of marketing

strategy by contextualfactors

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as they are generally manufactured to meet the customers’ uniquespecifications.

The analysis of the strategic focus of firms by their market type has beenanalysed by their proportion of exports in total annual sales. The figuressuggest that there are no differences based on the level of export activity.However, exporting firms are found to put relatively higher emphasis onmarketing than non-exporting firms. The need for marketing for gaining acompetitive edge in export markets is also suggested by AMC (1994) and BIE(1990). The results shown in Table VI also suggest that the firms that have avery high sales growth in domestic markets put relatively more emphasis onmarketing strategy. However, a similar analysis for export sales growth doesnot indicate any evidence of difference on marketing strategy. The analysisshown in Table VII also does not indicate any evidence of difference onmarketing efforts by industry category. Table VII also shows the test ofdifference in marketing efforts by the business strategy adopted by the firms.The results indicate that the adopters of mixed strategies of cost leadership anddifferentiation put more emphasis on marketing strategy than the firms whichadopt a focus on generic strategy.

ConclusionsThis research investigated the relative importance given by the Australianmanufacturing industry to marketing strategy in a mix of other functionalstrategies. The results suggest that the marketing strategy had been accordedthe third highest importance in the past after operations strategy and R&D

By industry category By business strategy (generic strategies)

Industry category

Marketingstrategyscores Generic strategy

Marketingstrategyscores

Food (n ¼ 33) 4.41 Cost leadership (n ¼ 41) 4.06Textile (n ¼ 19) 4.36 Differentiation (n ¼ 43) 4.39a

Wood (n ¼ 8) 4.68 Focus (n ¼ 29) 3.78a,b

Printing (n ¼ 12) 4.17Cost leadership + differentiation(n ¼ 54) 4.39b

Chemical (n ¼ 31) 4.17 Cost leadership + focus (n ¼ 11) 4.25Mineral (n ¼ 49) 3.7 Differentiation + focus (n ¼ 44) 4.32

Metal (n ¼ 49) 4.05Cost leadership + differentiation+ focus (n ¼ 3) 3.67

Machinery and equipment(n ¼ 47) 4.29Others (n ¼ 20) 4.14F-value 0.55 1.22

Note: the superscripts a,b denote significant differences in means

Table VII.Industry category,business strategy(generic strategies) andmarketing strategy

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strategy, but it has not been as effective as operations strategy and technologystrategy. The results also reveal that much of the technological efforts shouldhave gone into a process engineering aspect such as process improvement orcost reduction rather than a product engineering aspect such as productdevelopment. The development of new market segments or customers has beenfound as a top priority strategy under marketing strategy, followed byafter-sales service improvement and market forecasting. Within the marketingstrategy, these marketing initiatives have also been found effective.

This research also investigated the relationship between the marketingstrategy variables and organisational performance. The results suggest thatthe correlations are generally weak and very few of them are significant. Theincrease in efforts for the development of new market segments/customers isfound to be positively associated with the increase in sales growth in domesticand export markets. The outcome of multiple regression analyses indicates thatmarket forecasting has a positive and significant relationship with the returnon total assets, while the development of new market segments/customers andmarket share analysis have a negative and significant relationship. Thissuggests that the initiatives for the development of new marketsegments/customers and market share analysis involve substantial amountsof expenditure.

This research also investigated whether contextual factors had any impacton the level of emphasis on marketing strategy along with other functionalstrategies. It was found that marketing strategy was a very important strategyfor:

. larger firms than smaller firms;

. firms which are involved in consumer goods production or the productionof both consumer and industrial goods than those which are involved inthe production of only industrial goods;

. exporting firms than non-exporting firms;

. firms with higher domestic sales growth than with lower domestic salesgrowth.

Future researchThis research had to include all the strategic variables relevant to differentorganisational functions to investigate the relative importance of marketingstrategy in a mix of other functional strategies. Therefore, this study used alimited number of marketing variables. To enhance the value of this study fromthe marketing perspective and make it more useful for the marketingmanagers, a future study should consider more variables related to marketingsuch as online (Internet) marketing, advertising expenditure, marketingresearch, etc. This will provide a useful framework to the practicing managersin making a decision on marketing related efforts.

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