Organizing for Marketng Excellence
Moorman & Day
Marketng excellence: a superior ability to perform essental customer-facing actiites that improie
customer, financial, stock market and societal outcomes.
This artcle focusses on four elements of marketng organizaton (MARKORG)i (capabilites,
configuraton, human capital and culturei that play the most important role in marketng excellence
and show how these four elements are mobilized through seien marketng actiites (7Asi that occur
during the marketng strategy process.
We show that MARKORG) facilitates marketng excellence through its influence on the seien key
marketng actiites (7Asi in the marketng strategy process. Following the literature, the 7As are
actonable meditatng mechanisms through which the more intangible MARKORG) exerts its influence
on firm performance.
Marketng Capabiilites for Marketng Excellence
Marketng capabiilites: knowledge management, relatonal, brand management, strategic and
specific functonal capabilites.
Fiie methods are used to measure marketng capabilites:
Firm spending;
Effects of marketng actons;
The efciency of coniertng resource inputs into performance outcomes;
Knowledgeable and experienced managers;
Relatie to major compettors.
The contributon of marketng capabilites to firm performance:
Direct efectt: marketng capabilites contribute to reienue, profit, innoiaton and
employees.
Moderatin efectt: improie the returns from strategic actons and sofen the effects of
negatie press releases.
Iidirect efect: innoiatieness mediates the effect of market orientaton on performance.
, Marketng capabilites are deieloped through:
Ornaiizatoiaal approach: marketng capabilites are deieloped through emphasis on the
customer, high contact between departments, low centralizaton and formalizaton of
informaton, use of metrics and incenties to reward employees.
The ability to change capabilites reflects the firmms ability to learn, its market orientaton, its
experimentaton and partnering skills, and skills in resource reconfiguraton and capability
enhancement.
Marketng Confguraton for Marketng Excellence
Confguraton: the organizatonal setng within which marketng capabilites are exercised and
culture is actiated. Three topics are: structure, use of metrics and incenties and control systems.
Organizatonal Structure
A firmms market orientaton mediates the effect of marketng on business performance. Marketng
power has a positie effect on total shareholder returns.
Marketng actons add ialue to the firm, including customer-connectng actiites, inioliement in key
firm decisions and in carrying out critcal marketng and market orientaton actiites. Itt also
contributes to firm capabilites.
An organizatonal structure influences a firmms ability to learn from and respond to the market.
Strategy and marketng organizaton together influence firm performance, but this relaton is
dependent on the fit of the strategy with the structure.
A customer-based structure improies knowledge of and commitment to the firmms target customers,
identficaton and exploitaton of growth opportunites and accountability for managing customer
relatonships.
The Use of Metrics
Firms use more marketng metrics than financial metrics. The most commonly used marketng
metrics are awareness, total customers and market share. The most commonly used financial metrics
are iolume, sales, ROIt and net profit.
The number of marketng and financial metrics has a positie direct effect on the firmms marketng
mix, customer outcomes and profitability. The comprehensiieness of a marketng performance
measurement system impacts a firmms market alignment and knowledge which in turn influences
profitability and market performance.
The firmms market orientaton influences its use of marketng metrics (not financiali. Firms operatng
in more turbulent eniironments also use more metrics.
Incentves and Controls
Controls and incenties shape agentsm behaiiour to align with principals.
Marketers are more influenced by principles than by consequences when making ethical judgements
(deontological reasoningi.
A broader control system can ensure that an agent acts in the firmms best interest. Reward structures
are also an opton (indiiidual is. group rewards and single-period is. multperiod rewardsi.
Moorman & Day
Marketng excellence: a superior ability to perform essental customer-facing actiites that improie
customer, financial, stock market and societal outcomes.
This artcle focusses on four elements of marketng organizaton (MARKORG)i (capabilites,
configuraton, human capital and culturei that play the most important role in marketng excellence
and show how these four elements are mobilized through seien marketng actiites (7Asi that occur
during the marketng strategy process.
We show that MARKORG) facilitates marketng excellence through its influence on the seien key
marketng actiites (7Asi in the marketng strategy process. Following the literature, the 7As are
actonable meditatng mechanisms through which the more intangible MARKORG) exerts its influence
on firm performance.
Marketng Capabiilites for Marketng Excellence
Marketng capabiilites: knowledge management, relatonal, brand management, strategic and
specific functonal capabilites.
Fiie methods are used to measure marketng capabilites:
Firm spending;
Effects of marketng actons;
The efciency of coniertng resource inputs into performance outcomes;
Knowledgeable and experienced managers;
Relatie to major compettors.
The contributon of marketng capabilites to firm performance:
Direct efectt: marketng capabilites contribute to reienue, profit, innoiaton and
employees.
Moderatin efectt: improie the returns from strategic actons and sofen the effects of
negatie press releases.
Iidirect efect: innoiatieness mediates the effect of market orientaton on performance.
, Marketng capabilites are deieloped through:
Ornaiizatoiaal approach: marketng capabilites are deieloped through emphasis on the
customer, high contact between departments, low centralizaton and formalizaton of
informaton, use of metrics and incenties to reward employees.
The ability to change capabilites reflects the firmms ability to learn, its market orientaton, its
experimentaton and partnering skills, and skills in resource reconfiguraton and capability
enhancement.
Marketng Confguraton for Marketng Excellence
Confguraton: the organizatonal setng within which marketng capabilites are exercised and
culture is actiated. Three topics are: structure, use of metrics and incenties and control systems.
Organizatonal Structure
A firmms market orientaton mediates the effect of marketng on business performance. Marketng
power has a positie effect on total shareholder returns.
Marketng actons add ialue to the firm, including customer-connectng actiites, inioliement in key
firm decisions and in carrying out critcal marketng and market orientaton actiites. Itt also
contributes to firm capabilites.
An organizatonal structure influences a firmms ability to learn from and respond to the market.
Strategy and marketng organizaton together influence firm performance, but this relaton is
dependent on the fit of the strategy with the structure.
A customer-based structure improies knowledge of and commitment to the firmms target customers,
identficaton and exploitaton of growth opportunites and accountability for managing customer
relatonships.
The Use of Metrics
Firms use more marketng metrics than financial metrics. The most commonly used marketng
metrics are awareness, total customers and market share. The most commonly used financial metrics
are iolume, sales, ROIt and net profit.
The number of marketng and financial metrics has a positie direct effect on the firmms marketng
mix, customer outcomes and profitability. The comprehensiieness of a marketng performance
measurement system impacts a firmms market alignment and knowledge which in turn influences
profitability and market performance.
The firmms market orientaton influences its use of marketng metrics (not financiali. Firms operatng
in more turbulent eniironments also use more metrics.
Incentves and Controls
Controls and incenties shape agentsm behaiiour to align with principals.
Marketers are more influenced by principles than by consequences when making ethical judgements
(deontological reasoningi.
A broader control system can ensure that an agent acts in the firmms best interest. Reward structures
are also an opton (indiiidual is. group rewards and single-period is. multperiod rewardsi.
