Marketing Department Power and Firm Performance. (September 2015)

• Record Type: Journal Article
• Authors: Feng, Hui; Morgan, Neil A.; Rego, Lopo L.
• Is Part Of: Journal of marketing. Volume 79:Number 5(2015)
• Page Start: 1
• Page End: 20
• Publication Date: 2015-09
• Subjects: marketing department power -- marketing capabilities -- shareholder value -- firm performance; Marketing -- Periodicals; Marketing -- Management -- Periodicals; 658.8005
• DOI: 10.1509/jm.13.0522
• Languages: English
• ISSNs: 0022-2429

Abstract

This study empirically investigates marketing department power in U.S. firms throughout 1993–2008 and assesses its impact on firm performance. Using a new objective measure of marketing department power and a cross-industry sample of 612 public firms in the United States, the results reveal that, in general, marketing department power increased during this time period. Furthermore, the analyses show that a powerful marketing department enhances firms' longer-term future total shareholder returns beyond its positive effect on firms' short-term return on assets (ROA). The findings also reveal that a firm's long-run market-based-asset-building and short-run market-based- asset-leveraging capabilities partially mediate the effect of a firm's marketing department power on its longer-term shareholder value performance and fully mediate the effect on its short-term ROA performance. This research provides new insights for marketing scholars and managers with regard to both marketing's influence within the firm and how investments in building a powerful marketing department affect firm performance.