Marketing's Contribution to Strategy: The View From a Different Looking Glass

R Rajan Varadarajan
Texas A&M University

The 1970s and '80s were interesting as well as challenging times for marketing academics whose interests spanned the myriad facets and nuances of marketing, business, and corporate strategy. During this period, the strategy literature significantly benefitted from the confluence and integration of conceptual, theoretical, and methodological perspectives from a number of research streams including marketing, business policy and strategy, organization theory, finance, and industrial organization economics. Given the interdisciplinary nature of the evolution of strategy literature during the last two decades, both a critical assessment of marketing's past contributions to the strategy literature and a prognosis of the nature of contributions it is equipped to make and/or is likely to make in the years ahead were long overdue. Day's (1992) provocative and insightful article focusing on these issues is indeed timely and is bound to generate considerable debate and discussion among marketing academics. In Day's assessment, neither is marketing's contribution to the academic discourse about strategy during the eighties something to be proud of, nor is the prognosis regarding marketing's likely future contribution encouraging. Chief among Day's critical observations are: . The dimunition of the strategic role of marketing that began in the early eighties persists, and there are few signs that this slide will be reversed in the near future. Within academic circles, the contribution of marketing, as an applied management discipline, to the development, testing, and dissemination of strategy theories and concepts has been marginalized during the past decade. Academics outside of marketing pay little attention to marketing literature or theory.

Marketing's loss of influence in the academic discourse about strategy can be attributed to: 9 The preemption of marketing frameworks, concepts, and methods by other fields of inquiry. 9 The pervasive tendency among marketers addressing strategic issues to employ the theories and frameworks of other academic disciplines. 9 The ceding of some territory by marketing academics by shifting the balance of research activity further toward micro issues. 9 Tardiness among marketing academics in addressing some of the emerging and important issues coupled with the tendency to stay too long with outmoded characterizations of strategy and process issues.

In reference to the question, "Whether marketing as a field is going to actively participate in the strategy dialogue unleashed by these organizational challenges?", Day (I 992, p. 326) notes that while the field is qualified to make more significant contributions to the theory and practice of strategy, whether these contributions are made--and will have recognizable influence--depends on marketers seeing their relationship with other functions clearly, and then mobilizing their competencies effectively. In this regard, Day contends that specifying marketing's competencies more broadly, and articulating them in strategic terms may help overcome the prevailing view of marketing within strategic management as a narrowly engaged operating function. Towards this end, he proposes distinguishing between marketing's distinctive, integrative, and supportive competencies and elaborates its implications for identifying aspects of strategy where marketing as a function or discipline is equipped to assume an exclusive role, lead role, or participatory role.

Journal of the Academy of Marketing Science Volume 20, Number 4, pages 335-343. Copyright 9 1992 by Academy of Marketing Science. All rights of reproduction in any form reserved. ISSN 0092-0703.

THE VIEW FROM A DIFFERENT LOOKING GLASS

The strategic role of marketing can be addressed from various orientations and at varying levels of generality. It

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would be particularly appropriate to examine this issue in reference to recent major developments in the corporate and competitive strategy arenas. As Webster (1988) noted, "Marketing is . . . an applied discipline. The problems studied are defined by a changing environment . . . . the phenomena we study are real world problems" (p. 49). A timely and appropriate vantage point from which issues relating to the strategic role of marketing merits examination is the restructuring and asset redeployment that seems to be sweeping across the landscape of corporate America. Exploration of the strategic role of marketing from a different vantage point, elaboration of areas of disagreement, and reiteration of certain important observations made by Day constitute the principal thrusts of this commentary. Before delving into specifics, two points merit mention upfront. First, the approach taken here, namely, anchoring a significant portion of the discussion on the strategic role of marketing to a single, albeit an important corporate phenomenon of the eighties, limits the amount of space that can be devoted to discussion of key issues from other vantage points. Second, in order to elucidate how corporate restructuring and asset redeployment is likely to impact on the strategic role of marketing (specifically in reference to corporate and competitive strategy), there is a need to first present an overview of the former.

tion of corporate America." Supportive of this watershed development are the findings of a recent study, which reports that from 1985 to 1989 the proportion of companies that were highly diversified--operating in more than 20 businesses--declined 37 percent, whereas the number of corporations operating in only one industry increased 54 percent (Fortune 1992). Cases in point: 1. A Business Week (1989) article notes that, during the conglomerate era of the 1960s and 1970s, ITT acquired some 200 companies, only to run the biggest fire sale in history in the 1980s (pp. 89-90). In the assessment of many, the deconglomeration process at ITT is not over as yet. "Definitive conglomerate, ITT, may be broken up" reads a recent news report (Reuters News Service 1992). Paramount Communications (formerly Gulf & Western) has gone through a radical transformation from a conglomerate company comprised of numerous unrelated businesses to a focused corporation comprised of two strategic business families (publishing and entertainment).

2.

Marketing's Contribution to Strategy at the Corporate Level

Corporate strategy is generally understood to mean strategy formulated at the highest level of the organization. It is primarily concerned with the firm's choice of businesses to be in [choices of (i) customer functions to satisfy; (ii) customer groups to serve; (iii) technologies to utilize; and (iv) stages of value added to be in] and resource deployment among the firm's portfolio of businesses or strategic business units (SBUs). Issues typically viewed as central to corporate strategy include:
1. 2. 3. Addition of new businesses to the firm's portfolio (diversification). Deletion of businesses from the firm's portfolio (divestiture). Effective management of businesses retained (product portfolio analysis, mission assignment, and resource allocation). Increasing or decreasing the scope of value-added stages in which individual businesses participate (vertical integration or vertical contraction).

4.

The sixties and seventies are widely characterized in the business press as the "era of conglomeration of corporate America." Diversified companies such as ITT and Gulf & Western were often described using phrases such as "the quintessential conglomerate company" or "the model of a modern conglomerate company." However, as a result of divestitures, a number of conglomerate companies of the sixties and seventies underwent significant transformation during the eighties. It is quite conceivable that the eighties, and most probably the nineties as well, will be recorded in the annals of business history as the "era of deconglomera-

The recent patterns of divestitures of large diversified finns are indicative of a clear move toward a greater degree of focus with respect to product-market-technology scope. The divestiture of businesses unrelated to a firm's core competencies along product, market, and/or technology dimensions seems to reflect managers' misgivings about their ability to operate many unrelated businesses, a preference to focus on a few related businesses, a growing belief that there are limits to the number of businesses that managers can understand, and that businesses are worth more to managers that understand them because they can run them better (Davidson 1987). The implications of these organizational developments in regard to the role of marketing in the corporate strategy arena can be highlighted in reference to mergers, acquisitions, and diversification, an area identified in Lyles' (1990) study as likely to have a significant impact on strategy research during the 1990s. A large majority of businesses divested by corporations striving to become more focused in terms of their product, market, and/or technology scope tend to be acquired by other firms; only a small percentage of divestitures are accounted for by leveraged buyouts or spin-offs as independent companies to the firm's shareholders. The question of "Who buys the corporate castoffs of companies going through deconglomeration?" can be addressed using a framework outlined in the Federal Trade Commission's (FTC) Statistical Report on Mergers and Acquisitions (1975). Table 1 provides a summary of the five acquisition categories (horizontal, market extension, product extension, vertical, and unrelated acquisitions) outlined in the FTC schema as well as illustrative examples of each. Although published estimates of the percentage of corporate acquisitions falling into each of the above categories for the 1980s are not readily available, a cursory examination of the numerous news reports on divestiture - acquisition transactions published in the business press reveals that, by and large, businesses divested by companies striving to become more focused, tend to be acquired by their direct or pe-

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TABLE 1 Framework for Classification of Corporate Acquisitions

Acquisition Type
Vertical. An acquisition is deemed vertical when the firms

involved had a potential buyer-seller relationship prior to the transaction agreement.

Horizontal. An acquisition is deemed horizontal when the firms

Exi~nrlp]e In recent years, both the Coca-Cola Co. and PepsiCo Inc. have been quite active in downstream vertical integration through acquisition of independent bottling companies. In 1983, Coca-Cola Co. sold its wine operations to Joseph E. Seagram & Sons, a leading producer of wine and other alcoholic beverages. The acquisition of Coca-Cola's wine operations instantly propelled Seagram into the No. 2 position in the domestic wine segment with a 11.2 percent share of the market. Hardees, a hamburger fast food restaurant chain, was in a position to expand the geographic scope of its operations from the southern and mid-western states of the U.S. to other geographic regions through its acquisition of Burger Chef hamburger chain, a division of General Foods Inc., and Roy Rogers hamburger chain, a division of Marriott, Inc. These horizontal market extension acquisitions have enabled Hardees to become the third largest hamburger chain in the U.S. (in terms of market share), displacing Wendy's in the process. In 1987, National Semiconductor Corp. acquired Fairchild Semiconductor Corp., a division of Schlumberger Ltd. National, primarily a manufacturer of standard components, through its acquisition of Fairchild, primarily a manufacturer of high-performance components, was in a position to broaden its product line, customer base, and technology, and become the world's sixth largest chipmaker, up from No. 1 i. Genera/ Motors' acquisition of Hughes Aerospace.

involved produce one or more of the same, or closely related products in the same geographic market.

Market extension. An acquisition is considered a market

extension when the two firms manufacture the same, or closely related products, but sell them in different geographic markets,

Product extension. An acquisition is considered a product

extension when the two firms are functionally related in production and/or distribution but sell products that do not compete directly with one another.

Unrelated. An acquisition is unrelated when two unrelated firms

consolidate.

ripheral competitors (i.e., acquisitions that in reference to Table 1 would fall in the horizontal, market extension, and product extension categories). Historically, the marketing literature has focused on how a firm can increase its market share through effective use of marketing tools and techniques. In other words, the primary emphasis has been on competing for market share gains on Main Street. Achieving market share gains through acquisition of competitors (on Wall Street!), despite becoming increasingly pervasive during the deconglomeration era of the eighties, has not been examined by marketing academics in any depth. Although horizontal, market extension, and product extension acquisition decisions are likely to be made at the corporate level, given that these types of acquisitions are vehicles for a business to increase its market share, enter new geographic markets, and broaden its product line, respectively, the marketing function's competencies to play a constructive role in these types of acquisition decisions could be put to use. While the extent to which marketing practitioners are actually involved in a firm's acquisition decisions (in particular, horizontal, market extension, and product line extension acquisitions) is an unknown, there is reason to believe that marketing managers are likely to be extensively involved in a firm's acquisition decisions. For instance, a recent study focusing on merger motives reports that marketing factors are a dominant consideration in a firm's acquisition decisions. Obtaining a greater market share was the reason most frequently cited by firms for acquiring other firms. Achieving better or more desirable distribution, acquiring products with excellent growth potential, acquiring well known brand names, gaining access to desirable market segments, and obtaining a strong customer base were found to be some of the other

important marketing-related factors underlying mergers and acquisitions (Hise I991).

Marketing's Contribution to Strategy at the Business Unit Level

Competitive strategy is generally viewed as focusing on how a business should compete in a given industry or product-market arena, or, more specifically on (1) "How can a business leverage its distinctive skills and resources into sustainable positional advantages?" and (2) "How should a business coalesce its functional area strategies into a coherent, integrated competitive business strategy?" With respect to the first of the two questions, a review of research on distinctive organizational skills and resources that SBU managers view as underlying their sustainable competitive advantage (SCA) in the marketplace provides insights into aspects of strategy in regard to which marketing is equipped to play either a dominant role, participatory role, or limited role. As detailed in Table 2, the marketing function is equipped to play a dominant role in the context of leveraging a number of distinctive organizational skills and resources into sustainable positional advantages, and a participative role in the context of a second subset of organizational skills and resources. It should, however, be noted that the potential to leverage these skills and resources into sustainable competitive advantages in specific competitive situations would depend on whether these skills and resources are valuable, rare, imperfectly imitable, and/or availability of strategically equivalent substitutes (see Barney 1991). The second aspect of competitive strategy (How should a business coalesce its functional area strategies into a

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TABLE 2 The Role of Marketing in Leveraging Organizational Skills and Resources into Positional Advantages
Role of Marketing 2 Organizational Skills and Resources Underlying Positional Advantages I
1. 2. 3. 4. 5. 6. 7. 8. 9, 10, 11, Customer service/product support (S) 3 Customer orientation/feedback/market research (S) Segmentation/focus (S) Knowledge of business (S) Effective sales force (S) Overall marketing skills (S) Name recognition/high profile (R) 4 Product line breadth (R) Installed base of satisfied customers (R) Market share (R) Size/location of distribution (R)

DR

PR

LR

12, Effective advertising/image (S---~R) ~ 13. Good distributor relations/S--*R) 14. 15. I6. 17. 18. 19. 20. 21. 22. Good management and engineering staff (S) Ability to offer low price/high-value offerings (S) Efficient, flexible production/operations adaptable to customers (S) Enterprising/entrepreneurial (S) Good coordination (SJ Reputation for quality (R) Shared vision/culture (R) Strategic goals (R) Location (R)

23. Product characteristics/differentiation (S---*R) 24. Continuing product innovations (S---~R) 25. Pioneer/early entrant in industry (S---~R) 26. Low-cost production (S) 27. Technical superiority (S) 28. Engineering research and development (S) 29. Financial resources (R) 30. Powerful well-known parent (R) The above list of organizational skills and resources underlying positional advantages (adapted from Aaker 1989) is intended to be illustrative rather than exhaustive. From the standpoint of a specific competitive context, in order to infer whether these skills and resources constitute a source of sustainable competitive advantage, the following issues must be addressed: is the skill or resource in question (a) valuable, (b) rare, (c) imperfectly imitable, and/or (d) characterized by the absence of strategically equivalent substitutes? (see Barney 1991). 2DR: Dominant Role PR: Participatory Role LR: Limited Role/No Role 3S: Superior organizational skills as a source of competitive advantage. 4R: Superior organizational resources as a source of competitive advantage. 5S----~R: Superior organizational skills leading to superior resources. For example, effective advertising skills enabling a company to develop a favorable image for the firm and its product/service offerings in the marketplace (resource). Similarly, while organizational competencies that enable a firm to maintain cordial relations with its distributors can be construed as a skill, the firm having better relationships with its distributors than its competitors can be construed as a resource.

coherent, integrated c o m p e t i t i v e business strategy?) also suggests that marketing has considerable potential to contribute to strategy formulation at the business unit level. Day (1992) notes that a c a d e m i c s outside o f marketing pay little attention to marketing literature or theory and marketing academics have ceded s o m e territory by shifting the balance o f their research activity toward micro issues. Clearly, there is no easy answer to the question o f what are micro issues, what are m a c r o issues, and what is the opt i m u m balance. W h i l e marketing a c a d e m i c s have often been admonished for their fixation with the brand as a unit of analysis and a tendency to focus on m i c r o issues, it is interesting to note that researchers in other a c a d e m i c disciplines e n g a g e d in research at a m o r e m a c r o level (e.g., the

strategic business unit level) and p r e s u m a b l y focusing on more m a c r o issues (e.g., the generic c o m p e t i t i v e strategiesperformance relationship) s e e m to be doing so without an appreciation and understanding o f the functional area strategies underlying business level strategy. An examination o f published research on c o m p e t i t i v e strategy-related issues reveals that a significant portion is carried out at a high level o f aggregation and, for the most part oblivious to the marketing literature, in particular, important aspects o f c o m p e t i t i v e marketing strategy. Table 3 constitutes a partial list o f c o m p e t i t i v e strategy constructs g e r m a n e to marketing but rarely taken into account in research on c o m p e t i t i v e strategy published in the strategic m a n a g e m e n t discipline. M a n i f e s t in m a n y o f these market-

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TABLE 3 Selected Marketing Dimensions of Competitive Strategy

1. Product-market coverage strategy Single product-market concentration Market specialization Product specialization Selective product-market specialization Full product-market coverage Positioning of a firm's offerings relative to the positioning of competitors' offerings Positioning of a firm's offerings in individual market segments relative to positioning in other market segments served by the firm. Undifferentiated marketing Differentiated marketing Concentrated marketing Broad product line Narrow product line Single brand strategy Multibrand strategy Market skimming price strategy Market penetration price strategy Intensive distribution Selective distribution Exclusive distribution Primary demand stimulation Selective (secondary) demand stimulation Relative emphasis on: Push strategy
VS.

2. Positioning strategy

3. Market segment coverage strategy

4. Product line strategy 5. Brand strategy 6. Pricing strategy 7. Distribution (intensity) strategy

8. Demand stimulation strategy 9. Promotion mix strategy

Pull strategy 10. Product-market growth strategy Relative emphasis on: Market penetration (promoting present products in present markets), Market development (promoting present products in new markets), and/or Product development (developing new products for present markets) Relative emphasis on: Retaining present customers (defensive marketing)
VS.

1 I. Customer focus strategy

Attracting new customers (offensive marketing) 12. Use focus strategy Relative emphasis on: Promoting present uses
VS.

Promoting new uses 13. New product development strategy Relative emphasis on: Variety extension new products development, Replacement new products development, Competitive substitute new products development, and/or New to the world new products development

ing strategy dimensions are the differentiation aspects of generic competitive strategy. The limitation of published research focusing on business strategy broadly construed as cost leadership, differentiation, cost focus and differentiation focus, but oblivious to finer functional area strategy nuances such as (a) the relative emphasis on push versus pull strategy, primary versus secondary (selective) demand stimulation, market penetration versus market development; (b) pursuit of a single versus multibrand strategy, market skimming versus market penetration pricing strategy, and intensive versus selective distribution; and other aspects of marketing strategy detailed in Table 3 sheds light into their limited managerial relevance, as well as points to an opportunity for marketing to make a contribution. Strategic management, as a distinct field of inquiry, was supposed to build on the foundations of the previous busi-

ness policy work on functional integration, with a liberal borrowing from related areas including marketing (Day 1992). Interestingly, in his assessment of the current state of strategic management, a respected scholar in the strategic management field notes: "The field is increasingly populated with technique, narrow theories, and partial views. Too few in the field seem interested in integration; the general manager has been all but lost" (Hambrick 1992, p. 9).

The Genesis of Strategic Competencies

l ~ k e t i n g ' s potential to contribute to corporate level and busi~iess level decisions principally stems from the competencies that marketing academics and practitioners acquire as a result of their extensive involvement in certain types of activities. In most organizations, marketing as a boundary-

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spanning organizational function through its constant and continuous interface with the external environment at large, and customers, competitors, and channel members in particular, develops certain unique competencies within the organization. It is the importance of these competencies in the general management context that is most often advanced as justification for marketing's greater involvement in corporate and business level strategic decision making. The similarity and parallels that exist between a number of strategic issues of principal concern to managers at the marketing function level and the corporate level also provide insights into marketing's potential to contribute to decision making at the general management level. For instance, three product mix-related issues that concern decision makers at the marketing function level are: 1. 2. 3. New product decisions Product deletion decisions Effective management of present product mix

The "Why" of Outdated Problems and Irrelevant Methods: Part of Strategy Dialogue Too
Day (1992) notes that marketing academics are often slow to respond to changes in "received wisdom" and are prone to work on outdated problems or to advocate methods that have been dismissed by users. Even here, with a slight shift in research focus, there can be a contribution to the strategy dialogue. More generally, a discipline's advancement and the needs of its constituencies can be better served when exploration of the causes underlying managerial problems becoming dated and methods losing their relevance is also construed as an integral part of the research dialogue. A case in point is a widely advocated analytic input to strategic market planning during the seventies--the matrix approach to product portfolio analysis--which seems to be gradually losing its relevance as a result of the deconglomeration phenomenon of the eighties and nineties. The emergence and widespread use of matrix approaches to business portfolio analysis during the conglomerate era of the seventies was largely in response to the problems and challenges of managing diversity in large multibusiness organizations. A closer examination of the assumptions underlying matrix approaches to business portfolio analysis (either explicitly stated or implied) clearly suggests that conglomerate diversified and unrelated diversified firms are the only multibusiness organizational contexts in which it is appropriate to employ these analytical tools as inputs for business retention/deletion decisions ~. Since these firms are characterized by a lack of cost and demand interdependencies between individual businesses comprising the firm's business portfolio, business retention/deletion decisions with respect to individual businesses can be made independent of other businesses in the firm's portfolio. However, in related diversified firms, due to the existence of cost and/or demand interdependencies (economies of scope/shared assets/ shared customers/marketing, manufacturing and technological synergies), retention/deletion decisions regarding individual businesses cannot be made independent of other businesses in the firm's portfolio. As a result of extensive divestitures of unrelated businesses initiated by U.S. corporations during the 1980s, today's corporate landscape is, for the most part, characterized by firms that are either related diversified (the firm's portfolio being characterized by cost and/or demand inter-relationships between SBUs), highly focused (the firm's portfolio being comprised of a select few SBUs), or single business firms. For example, Coca Cola Inc.'s current portfolio is comprised of just two core businesses, and PepsiCo's current portfolio is comprised of just three core business sectors. While for firms that have gone through such transformation, matrix approaches to portfolio analysis are of limited or no relevance, it should, however, be noted that conglomerate and unrelated diversified firms haven't altogether gone into oblivion. Hence, the potential for their use in limited organizational contexts still exists. However, even here, caution is warranted when basing decisions utilizing this tool in light of the fact that portfolio analysis is grounded in deterministic assumptions regarding the environment. For example, in the growth-share matrix

A parallel set of issues at the business portfolio level that are of principal concern to decision makers at the corporate level are: 1. 2. 3. Entry into new product-market domains: Diversification Exiting from present product-market domains: Divestitures Effective management of the present business portfolio

It is evident that while the level of aggregation may differ (brand, product, product line, SBU, or strategic business family), the principal concerns of decision makers at various levels within an organization tend to be very similar. Given that a vast body of literature focusing on a wide range of questions pertaining to new product decisions (product deletion decisions) exists in the marketing discipline, clearly the potential for enrichment of the diversification (divestitures) literature through the contributions of marketing academics engaged in research on new product innovation (product deletion) exists. Also, marketing academics engaged in research on new product innovation and product deletion decisions stand to benefit from gaining insights into the theories, methods, and issues discussed in the diversification and divestiture literatures, respectively. Similarly, it is reasonable to assume that marketing managers, as a result of their involvement in new product decisions and product deletion decisions, would be quite familiar with the myriad nuances underlying these decisions. The insights of these managers routinely involved in making new product decisions and product deletion decisions at the product-market level can contribute to better diversification- and divestiture-related decisions being made at the corporate level. Here again, marketing managers may be able to refine their new product-related and product deletion-related decision making skills by gaining an understanding of, and appreciation for, the issues involved in diversification and divestiture decisions.

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approach, market growth rate is viewed as an exogenous variable beyond the control of the individual firm. Quite realistically, neither the assumption of environmental determinism that implies that superior firm performance is contingent on appropriate adaptive responses by the firm, nor the assumption of environmental management that implies that a firm can achieve superior performance by proactively managing/shaping/controlling/influencing the environment in which it competes is likely to hold across the many SBUs comprising the firm's portfolio and the many facets of the environment (see Varadarajan, Clark, and Pride 1992).

THE BLURRING AND OBSCURING FUNCTIONAL ROLE OF MARKETING

Day (1992, p. 323) notes that "Paradoxically, the deeper marketing is embedded within an organization and becomes the defining theme for shaping competitive strategies, the more likely of the role of marketing as a distinct function to be diminished." Continuing on, he cites Webster (1991): "At the extreme, the marketing function could disappear as a distinct management function and specialty. Perhaps marketing and strategic planning will merge into a single core function responsible for keeping the firm focused on the changing marketplace." Perhaps further elaboration of this issue, in reference to the meaning ascribed to the term marketing--whether it is viewed as a general management responsibility, an organizational orientation, or a distinct function--may help to clear up some of the confusion. While the specter of the marketing function disappearing as a distinct management function and specialty sounds intriguing, the prospects seem to be dim, particularly in the context of marketing operations management. A clear delineation of marketing operations management from marketing strategy suggests that, while marketing operations management will continue to exist as a distinct management function and specialty, the possibility that the marketing planning and strategy formulation process might be subsumed within the business planning and competitive strategy formulation process exists. The more marketing becomes a defining theme for shaping competitive strategy, the more there will be a blurting and obfuscation of the distinction between competitive strategy and marketing strategy. From a competitive strategy perspective, the greater the perceived importance of the marketing elements of overall competitive strategy to achieving and sustaining competitive advantage, the greater the likelihood that marketing strategy formulation and planned changes in marketing strategy might be viewed by top management as too important to be decided at the marketing function level. Similarly, from a corporate strategy perspective, in firms that have chosen either to become single business firms through divestiture of all of their noncore businesses or highly focused multibusiness firms through divestiture of most of their non-core businesses, top management is likely to become more intimately involved in business level and functional area strategic decisions. Despite the increased prospects of corporate level and business unit level managers becoming more involved in

marketing strategy decisions, it is inconceivable that marketing as a distinct organization function, and the marketing department as a distinct organizational entity entrusted with primary responsibility for marketing operations management, would disappear. Managing the sales force, interfacing with advertising, sales promotion, and marketing research agencies, managing relationships with marketing intermediaries, and numerous other day to day marketing operations management activities clearly call for specialization in regard to these organizational activities. As Van de Ven and Morgan (1980) point out, different levels of a corporation constitute distinct organizational subsystems, each with different though interdependent subgoals, unique tasks and functions to be performed, and different structures and processes for organizing their activities. Also suggestive of a need for greater functional specialization, yet a greater degree of cooperation between functional areas, is the impending emergence of mass customization as the new competitive reality. In an increasing number of industries, the notion of cost leadership and differentiation as alternative generic strategies for achieving and sustaining competitive advantage is being supplanted by mass customization as a way of doing business. Offering to consumers the cost benefit of mass manufacturing and the differentiation benefit of customization is becoming a competitive imperative in these industries. Advances in information technology, computer-aided design and computer-aided manufacturing, flexible manufacturing systems, and other areas have propelled many firms to rightly view achieving a sustainable competitive advantage in an era of mass customization as the new and emerging competitive frontier. While the dawn of mass customization is likely to usher in as well as necessitate a greater degree of coordination and cooperation between the production and marketing functions, one can confidently assert that both will maintain their distinct identities entrusted with primary responsibility for certain spheres of organizational activity.

THE STRATEGIC IMPERATIVES OF THE NINETIES

Among an organization's assets that are invisible, immobile, imperfectly imitable, and/or intangible, 2 and that are also its sources of sustainable competitive advantages, are its marketing skills at large (e.g., positioning and differentiation skills; implementation skills), market knowledge (e.g., monitoring and interpretation of environmental change; understanding of buyer behavior; understanding of competitors' strengths and vulnerabilities), customer orientation, customer service, customer relationship management, and brand name and image, to list a few. Interestingly, among the rallying themes reverberating in many organizations, big and small, are the importance of quality, innovation, customer service, customer satisfaction, being close to the customer, relationship marketing and management, building trust in buyer-seller relationships, and market orientation (customer orientation and competitor orientation) for surviving and prospering in an intensely competitive market environment. 3 Marketing academics should take comfort in the fact that these strategic imperatives of the nineties augur well with the competencies of

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marketing and forebode a major role for the function in strategy formulation and implementation. However, lest we get too carried away by the implications (for marketing) of the strong fit between marketing's competencies and the strategic imperatives of the nineties, Day's (1992) observation that no single discipline or perspective can or should aspire to dominate the strategy dialogue, and that complex issues are best illuminated by multi-disciplinary approaches and theoretical frameworks, and dealt with by multi-disciplinary managers, is a timely and appropriate reminder. A "disciplinary turf" attitude is counter-productive to knowledge creation, to say the least. It is rather unfortunate that, at times, some academics, swayed by their belief that unambiguous disciplinary boundaries exist between the business disciplines, exhibit a tendency to stake claims in regard to substantive content areas as falling within their specific business discipline or sub-discipline 4. In closing, a brief mention of one other corporate priority of the nineties, and the role that the marketing function is

equipped to play in this priority area, is merited. Pursuit of ecologically responsible and environmentally friendly policies and practices is likely to become an increasingly important organizational imperative in the years ahead. Enviropreneurial marketing (a broader construal of organizational activities than typically associated with the term "Green Marketing") appears to be taking roots in a growing number of organizations, as well as gradually gaining consumer acceptance. Table 4 summarizes some preliminary thoughts on this emerging issue. With over 100 heads of state having attended the Earth Summit sponsored by the United Nations in 1992, there is little need to belabor the importance of organizations becoming more enviropreneurial in their orientation. In as much as innovation, entrepreneurship, and intrapreneurship are critical to the survival, growth, and profitability of organizations, enviropreneurship is likely to become critical in upholding an organization's legitimacy in the eyes of a multiplicity of stakeholders. 5 Given that, collectively, the enviropreneurial marketing initiatives of organizations can have far reaching

TABLE 4 Enviropreneurship: An Idea Whose Time Has Come

A. Key Terms Entrepreneur: Enviropreneur:
A person who organizes, manages, and assumes the risks of a business enterprise. A person who in organizing and assuming the risks of, and managing the activities of, a business enterprise pursues environmentally responsible (environment-friendly) policies, procedures, and practices. (Adj: Enviroprenuerial. Adv: Enviropreneurship) Organizations that pursue environment-friendly policies, procedures, and practices in the conduct of their business activities. Executives who champion the adoption of environment friendly policies, procedures, and practices by one or more organizational units of the firm. Environment-friendly marketing policies, strategies, and tactics initiated by a firm in the realm of marketing: 1. To achieve a competitive differentiation advantage for the firm's offerings vis-a-vis competitors' offerings. 2. Influenced by the firm's views on the duties and responsibilities of a corporate citizen.

Env|roprenuerial firms: Enviropreneurial managers: Envtropreneurial marketing:

B. Plausible Factors Underlying the Enviropreneurial Initiatives of Firms

9 Potential for achieving a competitive advantage 9 Basis for achieving a differentiation advantage in an era of me-too products 9 To neutralize the differentiation advantage achieved by a competitor pursuing environment-friendly policies and practices 9 Genuine concern for the wellness of the environment 9 Recognition of impending threats (economic. legal, regulatory, societal, etc.) due to growing concerns regarding the impact of the firm's product offerings on the environment 9 Transfer of organizational learning from geographic markets (both intra- and international) where the firm faces more stringent environmental protection regulations 9 Governmental mandate 9 Economic considerations 9 Other: Moral bighground/Opportunism/Fad (the Green Marketing Bandwagon)/Marketing ploy/Gimmick

C. Some Key Questions

1. What are the hallmarks/distinctive characteristics of: 9 Enviropreneurs? 9 Enviropreneurial firms'? 9 Enviropreneurial managers? 2. What factors motivate individuals, managers, and/or firms to adopt an enviropreneurial orientation? 3. What kinds of enviropreneurial strategies would enable a firm to achieve a competitive advantage in the marketplace'? 4. To what extent should achieving a competitive advantage be a (major) consideration in regard to organizational actions that concern the wellness of the environment?

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implications for societal welfare, the potential for marketing to make an important contribution in this field transcends disciplinary as well as organizational boundaries.

Report on Mergers and Acquisitions. Washington, D.C.: U.S. Government Printing Office.

Fortune. 1992. "Is Big Still Beautiful?" 123 (April 20): 50-60.
Hambrick, Donald. 1992. "20 Years Strong: Perspectives from the Past Chairs." Business Policy and Strategy Newsletter (Spring): 8-9. Hise, Richard T. 1991. "Evaluating Marketing Assets in Mergers and Acquisitions." Journal of Business Strategy 12 (July-August): 46-51. Kerin, Roger A., Vijay Mahajan, and P. Rajan Varadarajan. 1990. Contemporary Perspectives on Strategic Market Planning. Boston, MA: AUyn & Bacon. Kumar, Anil and Graham Sharman. 1992. "We Love Your Product, But Where Is It?" Sloan Management Review 33 (Winter): 93-99. Lyles, Marjorie A. 1990. "A Research Agenda for Strategic Management in the t990s." Journal of Management Studies 24 (July): 363-375. Reuters News Service. 1992. "Definitive Conglomerate, ITT, May Be Broken Up." Houston Chronicle (February 27): 2B. Saunders, Charles. 1992. "20 Years Strong: Perspectives form the Past Chairs." Business Policy and Strategy Newsletter (Spring): 8-9. Van de Ven, Andrew H. and Marilyn A. Morgan. 1980. "'A Revised Framework for Organizational Assessment." In Organizational Assessment. Eds. Edward E. Lawter III, David A. Nadler, and Cortlandt Cammann. New York: John Wiley & Sons, 216-260. Varadarajan, P. Rajan, Terry Clark, and William M. Pride. 1992. "Controlling the Uncontrollable: Managing Your Market Environment." SIoan Management Review 33 (Winter): 39-47. Webster, Fredrick E. 1988. "Comments on the AMA Task Force Study." Journal of Marketing 52 (October): 48-51~ - - . 1991."The Changing Role of Marketing in the Corporation." Commentary. Cambridge, MA: Marketing Science Institute.

NOTES
I. For a fuller discussion on the limitations of the matrix approaches to portfolio analysis and the validity of the underlying assumptions see Kerin, Mahajan, and Varadarajan (1990 pp. 63-64; pp. 92-98). The differences between these related and overlapping concepts is an issue outside the scope of this commentary~ Case in point, at Dell Computers, every Friday at 7:30 a.m. top managers reportedly get together for one of the most important meetings on the corporate schedule. At this consumer advocacy meeting, during which weekly performance statistics are reviewed, every performance measure scrutinized relates to customer satisfaction (Kumar and Sharman 1992). In a recent report entitled, "20 Years Strong: Perspectives from the Past Chairs," published in the newsletter of the Business Policy and Strategy Division of the Academy of Management, Charles Saunders reminisces about the issues discussed at the meetings of the division's Executive Committee during the period 1980-81. He writes that "There was also some discussion, largely informal, regarding the increasing reach of our friends in marketing into 'our' strategy area" (p.8). The term "enviropreneurship" was suggested to me by Professor Terry Clark, University of Notre Dame.

2. 3.

4.

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ABOUT THE AUTHOR REFERENCES

Aaker, David A. 1989. "Managing Assets and Skills: The Key to a Sustainable Competitive Advantage." California Management Review 32 (Winter): 91-106. Barney, Jay. 1991. "Firm Resources and Sustained Competitive Advantage." Journal of Management 17 (March): 99-120. Business Week. 1989. "Is your Company Too BigT' (March 27): 84-94. Davidson, Kenneth M. 1987. "Do Megamergers Make Sense?" Journal of Business Strategy 7 (Winter): 40-48. Day, George S. 1992. "Marketing's Contribution to the Strategy Dialogue." Journal of the Academy of Marketing Science, 20 (Fall): 323-329. Federal Trade Commission, Bureau of Economics. 1975. FTC Statistical

E Rajan Varadarajanis Foley's Professor of Retailing and Marketing at Texas A&M University. He received his Ph.D. in business administration from the University of Massachusetts, Amherst. His major research interests are in the areas of corporate, business, and marketing strategy. His research has been published in the Journal of Marketing,
Journal o f the Academy o f Marketing Science, Academy o f Management Journal, Strategic Management Journal, SIoan Management Review, California Management Review, Business Horizons, Journal o f Business Research, a n d

other journals.

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