Sales-Marketing Thought Worlds in Mexican

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1 H2: The differences between sales and marketing competencies in terms of (a) market knowledge, (b) product knowledge, and (c) interpersonal skills will be negatively related to marketing s organizational influence. In the thoughts worlds model, the differences between marketing and sales on the five sub-dimensions mentioned above affects the quality of cooperation between these two areas. Thus we hypothesize the following: H3: The differences between sales and marketing departments in terms of orientation [(a) customer and (b) long-term orientation] and competence [(c) market knowledge, (d) product knowledge, and (e) interpersonal skills] will be negatively related to quality of cooperation between marketing and sales. Homburg and Jensen (2007) define the quality of cooperation as the capacity of these two areas to work together to reach specific organizational goals that will have positive impact on the marketing performance of the company. We expect the following: H4: The quality of cooperation between marketing and sales is positively related to the marketing performance of the organization. METHOD In order to test the hypotheses presented, an online survey was designed. Instructors of MBA courses at a private university with 26 campuses in Mexico requested the participation of students enrolled in their courses. Most students in this graduate business school are part time students. Due to the interest of replicating Homburg and Jensen s (2007) study in Mexico, the measures of their Sales-Marketing Thought Worlds model were used in this study. The items of each construct were translated and backtranslated and reviewed by marketing academics to ensure that the translated items measured the original objectives of each item. After the collection of data the constructs were analyzed using confirmatory factorial analysis to ensure the structural stability of the items for each construct. All the items were measured using a 5-point Likert scale. The calculations of the differences between world views of Orientation (customer and time orientation) and Competence (market knowledge, product knowledge, and interpersonal skills) also followed Homburg and Jensen s method in which each orientation and competence was measured for marketing and for sales and the difference was squared. Based on research on marketing influence, the study also included an assessment of the perceived marketing influence of the marketing and sales departments in the organizations. 51

2 International Business: Research, Teaching and Practice (2) SAMPLE RESULTS The data collection resulted in 485 responses. The final number of participants was 352 after omitting from analyses incomplete questionnaires and respondents who did not work in marketing or sales, or who did not collaborate with or supervise one of these two areas. The data suggest that the sample includes relatively young employees since the average number of years working in a discipline is 5 years. Gender was almost equally divided between male (46%) and female (54%). More than half of the subjects in the study worked for large (500+ employees) or mid-sized ( employees) corporations. In terms of their roles in the organizations, 42% of the respondents worked in marketing while 20% reported to a sales department. The rest of the respondents either supervised or had frequent interactions with sales and/or marketing. The industries represented in the study included all major commercial areas in Mexico: service, manufacturing, food and beverages, and others. See Table 1 for a detailed description of the sample. Table 1: Characteristics of the sample. n = 352 Gender Female 54% Male 46 Relationship with marketing/sales Marketing 42% Sales 20 Close relationship with the departments 34 Supervisor 4 Years working in the area Mean 5.32 SD 5.05 Number of employees % Industry Services (Financial, education, professional) 44% Food and Beverages 17 Manufacturing 13 Retail 10 Building/Infrastructure 9 Pharmaceutical 4 Other 3 52

3 RELIABILITY OF MEASURES As indicated by Table 2, the measures extracted from Homburg and Jensen s (2007) model had similar levels of reliability. Some noteworthy differences are time orientation that had a lower reliability than the original study and interpersonal skills difference that had a better reliability than the previous model. The assessment of the perceptions of marketing influence of the marketing and sales departments in an organization also suggested a reliable result (α =.66). Table 2: Composite reliabilities. Quality of cooperation between marketing and sales Composite Reliability Homburg and Current study Jensen s (2007) Market performance of business unit in regard to customer (versus product) orientation in regard to short- term (versus long- term) orientation in regard to market knowledge in regard to product knowledge in regard to interpersonal skills Formative scale Formative scale DESCRIPTIVE RESULTS A series of t tests to determine the differences between sales and marketing areas in the sample suggest that in general, these two areas share generally similar views in terms of orientation and knowledge. As in the study by Homburg and Jensen (2007), sales was perceived as significantly more customer-oriented than marketing. See Table 3 for a detailed description of the t test results. 53

4 International Business: Research, Teaching and Practice (2) Table 3: Thought-World profiles of marketing and sales. Orientation Product- Consumer 1 = Product 5 = Customer Short- Long Term 1 = Long- term 5 = Short- term Knowledge Market knowledge 1 = low, 5 = high Product knowledge 1 = low, 5 = high Interpersonal skills 1 = low, 5 = high Marketing Sales t- test t (351) = 4.13 p ns ns t (351) = 2.17 p ns HYPOTHESES TESTS Due to the relatively limited size of the sample and in the interest of testing a full model, the data was analyzed in a path analysis (instead of a full structural equation) that used the influence of marketing as the exogenous variable and the differences between the dimensions of thought worlds of marketing and sales (Orientation: customer and time and Competence: market knowledge, product knowledge, and interpersonal skills), quality of cooperation, and market performance as the endogenous variables. The original model that included the test of all the hypotheses was implemented in a path analysis using maximum likelihood estimation. The fit measurements did not suggest an adequate fit therefore the paths and constructs that were not significant were dropped from the model. A final model that included the significant constructs and relationships suggested an appropriate fit ( 2 = 7.2, df =5, 2/df = 1.44, GFI =.99, CFI =.99, RMSEA =.036). See Figure 1. The first two hypotheses forecasted that a higher marketing influence would have a negative effect on the difference between the orientation (H1) and knowledge (H2) dimensions of sales and marketing. As mentioned previously, the two differences related to orientation (customer and time) were found nonsignificant in the original model, therefore H1a and b were not supported by the results. The path of marketing influence and the three differences of knowledge (interpersonal skills, product, and market knowledge) were significant and as 54

5 predicted, negative ( = -.139, p 0.05; = -.158, p 0.001; = -.106, p 0.05) See Table 4. Therefore H2a, b, and c were supported by the results. Figure 1: Final model (standardized path coefficients). Table 4: Estimates of the final model. Standard Estimate S.E. C.R. p Diff. Interpersonal Skills Marketing Influence Diff. Market Knowledge Marketing Influence Diff. Product Knowledge Marketing Influence Quality of Collaboration D. Interpersonal Skills Quality of Collaboration D. Market Knowledge Market Performance Quality of Collaboration The following hypothesis (H3) followed Homburg and Jensen s (2007) prediction that the five differences between sales and marketing would reduce the quality of the relationship between these areas. The results of the first path analysis suggest that customer (H3a) and time (H3b) orientation differences had no effect on quality of the relationship. In the final path analysis, product 55

6 International Business: Research, Teaching and Practice (2) knowledge s coefficient (H3d) was non-significant as well. Interpersonal skills (H3c) and market knowledge (H3e) had significant and negative coefficients ( = -.159, p 0.001; = -.099, p 0.05). Therefore, H3c and H3e were supported by the data. Finally, it was hypothesized that levels of quality between areas would be positively related to the perception of the market performance of the business unit. The final path analysis confirms this hypothesis (H4) since there is a strong relationship between these two variables ( =.610, p 0.001). DISCUSSION IMPLICATIONS FOR MANAGERS AND PRACTITIONERS The world view differences between marketing and sales departments in Mexican companies were relatively low. Apparently, there is a high level of homogeneity of views between these two areas. Interestingly, employees who work in sales were perceived as more consumer-oriented than marketing employees who seems to be slightly more focused on the product. This outcome might be due to the different natures of their jobs. Marketers need to keep a holistic perspective of the brand and their effects in product decisions while salespeople have to interact daily with their consumers, focusing more on customer service and consumer behavior. This argument would also explain why employees in marketing were perceived as more knowledgeable about the product than sales, and why sales is more customer-oriented than marketing. The positive effect of this behavior is that both areas share almost the same view about their strategies functioning as a team integrated by different areas with complementary activities pursuing the same goal. Another corresponding explanation of this behavior is the respect of Mexican employees for defined structures and autocratic authorities who define for the rest of the team what to do. As it has been demonstrated by researchers, power distance in an organizational setting has a strong influence on employees expectations of guidance and decision making from their leaders. The final model results suggest that the influence of marketing reduces the differences between sales and marketing exclusively in the competence dimension. This demonstrates that, in contrast to Homburg and Jensen s (2007) model, the marketing influence of a marketing department in an organization might still be an important variable to consider in countries where this area does not have the same clout as in more developed countries. The results suggest that in Mexican companies, marketing s influence in the organization helps to unify the level of competence of sales and marketing, leading to a better relationship between these two departments that might have conflicting views. This unification of capabilities and quality of cooperation leads to a better market performance. The results of the study also suggest that marketing influence impacts the sales department s abilities but not its orientation toward consumers nor its 56

7 orientation in terms of time frame. A possible explanation for these results is the ability of marketing to influence the selection of potential sales employees as well as their training and rewards in order to achieve specific goals defined in the general marketing strategy. However, this power does not influence the focus of the sales team due to their need to deliver results in shorter terms than marketing and a need to think more about the consumer and their relationships with clients. In fact, Homburg and Jensen s (2007) managerial recommendations were that identical sales and marketing worlds are not recommended because different perspectives are beneficial for the market performance of the organization. However, for Mexican companies where the employees are looking for clear managerial hierarchical structure, it is recommended that sales and marketing share and work with the same marketing perspective to shift the company to the same market orientation. Achieving this objective will be more likely if the marketing department leads the orientation shift in the organization. More specifically, marketing should influence sales competencies especially in interpersonal skills and market knowledge by providing the marketing intelligence information that the sales executive needs to be more knowledgeable than the competition. The goal of influencing sales executives interpersonal skills is to act according to the brand positioning strategy of the firm. These two variables will affect in a positive way the quality of the collaboration and as a result the market performance of the organization. LIMITATIONS AND FUTURE RESEARCH This empirical test of Homburg and Jensen s (2007) Sales-Marketing Thought Worlds in Mexican companies is a first step to understanding marketing practices in developing countries. Future research should address some of its limitations. First is the limited size of the sample. Only 42% of the respondents worked in marketing, while 20% reported to a sales department. Future research should focus on samples in which the marketing and sales departments are well represented. Second, the unit of analysis was one person per organization. Perhaps the differences between thought worlds would be less homogeneous if the sample used dyads (an employee in sales and an employee in marketing) of participants. Future research should focus on samples in which the marketing and sales departments from the same company are represented. Third, due to the decision of sampling MBA students, the average number of years working in the area was relatively low. The data suggests that the average number of years working in a discipline was 5 years. Future research should focus on sampling more senior members of organizations. 57

8 International Business: Research, Teaching and Practice (2) Fourth, this study uncovered the importance of marketing s influence in sales. Future research should explore how this influence is seen across departments, since most of the development of marketing orientation models was empirically tested in countries with different cultural orientations from most Latin American countries. Finally, a cross-cultural study that includes companies headquartered in countries that exhibit different levels of marketing development and cultural orientations would allow a determination the drivers of the results of this study. REFERENCES Felix, R., & Hinck, W. (2005). Executive insights: Market orientation of Mexican companies. Journal of International Marketing, 13(1), Frucot, V., & Shearon, W. (1991). Budgetary participation, locus of control, and Mexican managerial performance and job satisfaction. Accounting Review, 66(1), Gebhardt, G. F., Carpenter G. C., & Sherry, J.F. (2006). Creating a market Orientation: A longitudinal, multifirm, grounded analysis of cultural transformation. Journal of Marketing 70(4), Homburg, C., & Jensen, O. (2007). The Thought Worlds of marketing and sales: Which differences make a difference? Journal of Marketing, 71(3), Homburg, C., Jensen, O., & Krohmer, H. (2008). Configurations of marketing and Sales: A taxonomy. Journal of Marketing, 72(2), Kobylanski, A., & Radoslaw, S. (2011). Development of marketing orientation in small and medium-sized enterprises: Evidence from Eastern Europe. International Journal of Management & Marketing Research, 4(1),

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