Drivers of sales and marketing collaboration in business-to-business selling organisations

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Drivers of sales and marketingcollaboration in business-to-businessselling organisationsKenneth Le Meunier-Fitzhugh & Nigel F. PiercyPublished online: 01 Feb 2010.

To cite this article: Kenneth Le Meunier-Fitzhugh & Nigel F. Piercy (2009) Drivers of sales andmarketing collaboration in business-to-business selling organisations, Journal of MarketingManagement, 25:5-6, 611-633, DOI: 10.1362/026725709X461885

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INTRODUCTION

There is a continuing debate about how to improve the working relationship between sales and marketing functions in business-to-business organisations (Dewsnap and Jobber 2000; Dawes and Massey 2005; Rouzies, Anderson, Kohli, Michaels, Weitz and Zoltners 2005; Kotler, Rackham and Krishnaswami 2006). There is very little empirical evidence available to shed light on the topic of collaboration between sales and marketing within organisations, although a number of writers have attempted to conceptualise the relationship (e.g. Dewsnap and Jobber, 2000; Rouzies et al. 2005; Biemans and Brencic 2007). One reason that this topic has been neglected until recently is that many organisations and customers habitually see sales and marketing as a single function because they are both customer-facing and have a similar objective, to increase sales and market share/market presence (Cespedes 1993;

JOURNAL OF MARKETING MANAGEMENT, 2009, Vol. 25, No. 5-6, pp. 611-633ISSN0267-257X print /ISSN1472-1376 online © Westburn Publishers Ltd. doi: 10.1362/026725709X461885

Drivers of sales and marketing collaboration in business-to-business selling organisations

Kenneth Le Meunier-FitzHugh, Norwich Business School, UK*Nigel F. Piercy, Warwick Business School, UK

Abstract This paper focuses on identifying and exploring the antecedents and consequences of collaboration between the sales and marketing functions within organisations and empirically tests the resulting model. There is evidence to show that collaborative sales and marketing functions have benefits to an organisation in terms of improved business performance, but many organisations have not yet achieved collaborative internal functions. The study identifies five antecedents to collaboration between sales and marketing and tests the proposition that greater collaboration between sales and marketing is linked to benefits in terms of improved business performance.

Keywords Sales and marketing, Interface, Integration, Coordination, Collaboration

JOURNAL OF

MARKETINGMANAGEMENT

*Correspondence details and biographies for the authors are located at the end of the article.

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Journal of Marketing Management, Volume 25

Webster 1997; Yandle and Blythe 2000; Homburg and Jensen 2007). However, in large organisations, sales and marketing are frequently structured as discrete and separate departments (Piercy 1986; Workman, Homburg and Gruner 1998; Kotler et al. 2006) that perform different functions (Shapiro 2002).

Strahle, Spiro and Acito (1996) found that organisations have difficulties in coordinating sales department goals with the marketing department’s objectives. If we accept that sales and marketing are two discrete functions with their own targets and goals, it is easy to understand why managers often focus on them becoming individually successful. Sales and marketing may have been set different goals by senior management and be working at cross purposes to each other (Anderson, Dubinsky and Mehta 1999; Olson, Cravens and Slater 2001). This has led to the development of two very different cultures and working practices between the two groups (Beverland, Steel and Dapiran 2006). Homburg and Jensen (2007) suggest that sales and marketing exhibit two different “thought worlds” based on alternative perspectives and competences.

The differences in culture and perceptions may be based on the fact that most sales teams have no other option but to work away from the central location, which leads to the sales groups bonding tightly together, and often excludes links with the office personnel, which can lead to difficulties in communications (Le Meunier-FitzHugh and Piercy 2007). This physical separation can aggravate the culture clash between the two groups and may lead to accusations of encroachment on each other’s territory (Colletti and Chonko 1997). According to Olson et al. (2001, p. 25) “the sales force plays a pivotal role in implementing business and marketing strategies”. However, many marketing staff do not understand the role or function of sales, and because of this lack of understanding, marketing probably miss many promotional opportunities (Cespedes 1993). On the other hand, many sales staff may regard marketing as being a support tool for the real business of selling, seeing themselves as bringing in new business and providing everyone else in the organisation with employment and income (Colletti and Chonko 1997; Yandle and Blythe 2000). It is recognised that sales and marketing operate at a sub-optimal level due to deeply embedded cultural paradigms and that there is now a call for senior managers to remove barriers between these two functions (Beverland et al. 2006).

Webster (1997, p. 45-46) noted, “The relationship between the sales and marketing functions has persisted as one of the major sources of organizational conflict. ...the appropriate relationship between the sales and marketing functions is still an unresolved issue”. Research into the appropriate relationship between sales and marketing and the factors that influence this interface is therefore timely. This paper aims to contribute to the existing debate on the sales and marketing interface by confirming that certain relationships that have been assumed and asserted in the past can be demonstrated empirically, rather than just thought to be true because they appear generally plausible. This will provided a more rigorous foundation for further conceptualisations and studies. In addition, this paper intends to provide a framework that will assist organisations to understand the issues and drivers of the sales and marketing interface

THE ANTECEDENTS TO COLLABORATION OF SALES AND

MARKETING AND BUSINESS PERFORMANCE

The extant literature that considers the relationship between sales and marketing is

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Le Meunier-FitzHugh and Piercy Drivers of sales and marketing collaboration 613

limited when compared to literature on other inter-functional relationships. Kotler et al. (2006, p. 78) state, “Every company can and should improve the relationship between sales and marketing…. These improvements will also help you serve customers better now and will help you build better products for the future”. It is therefore relevant that we investigate the interface between sales and marketing, so that collaboration can be promoted. The key constructs were drawn from the literature review and from exploratory interviews with managers and their relationships are shown in Figure 1. Exploratory research was conducted to establish working practices between sales and marketing, and to identify some of the elements influencing collaboration between these two functions. Three organisations (an industrial manufacturer, a consumer goods manufacturer/wholesaler, and a publisher) were selected for the exploratory study, all of which have separate sales and marketing functions and are large UK based organisations. A table of descriptive data about these organisations is included for clarity (see Table 1 overleaf).

We propose that management attitudes towards coordination, communications, interdepartmental conflict, organisational learning, and market intelligence will be antecedents to collaboration between sales and marketing, and may form the basis of a management strategy to improve the interface. Improved business performance is proposed as a consequence of increased collaboration between sales and marketing. These areas will now be reviewed in greater detail.

Collaboration between Sales and Marketing: The term “collaboration” is drawn from Kahn’s (1996) research into integration between R&D and marketing, which indicated that the collaborative elements of collective goals, mutual understanding, informal activity, shared resources, common vision and esprit de corps have a greater impact on performance than simply interaction. The focus is not on the integration of the activities of sales and marketing, as according to Shapiro (2002) and Kotler et al. (2006) sales and marketing necessarily have different activities performed by different people who are appropriate to each function. There is a tension between the need to retain the distinctiveness of sales and marketing functions because they perform different tasks, while simultaneously facilitating a collaborative stance and to coordinate efforts around organisational goals. The focus in this study is on the need for sales and marketing to collaborate rather than to integrate.

FIGURE 1 Antecedents and consequences of collaboration between sales and marketing

ManagementAttitudes towards

Coordination

Communication

InterdepartmentalConflict

OrganisationalLearning

MarketIntelligence

COLLABORATION

BETWEEN SALES

AND MARKETING

BUSINESS

PERFORMANCE

H1

H2

H3

H4

H5

H6

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Journal of Marketing Management, Volume 25JMM614

TABLE 1 Summary of descriptive data

Variables Publisher Industrial Manufacturer

Consumer Goods Company/

Wholesaler

Management Attitudes towards Coordination

Senior management play a key role in coordinating activities

Focused on sales success, but marketing activities are not always aligned with sales

Was a stated objective, but there was little evidence of aligning activities.

Communication E-mail Joint monthly

meetings

Video-conferencing and e-mail

No regular sales and marketing meeting

Phone-conferencing and e-mail

A weekly general meeting

Market Intelligence Sales and Trade Association sources

Held by individuals and disseminated through monthly interdepartmental meeting

Sourced from sales staff and from market intelligence companies

Held on corporate database and disseminated on request by individuals

Sales and Trade Associations sources

Held by the MD and disseminated at sales meetings.

Organisational Learning

Evidence of knowledge transfer.

Limited transfer of knowledge

No evidence of organisational learning

Collaboration between Sales and Marketing

Collaborative sales and marketing

Collaboration between sales and marketing in some areas

Limited collaboration between sales and marketing

Interdepartmental Conflict

Sales and marketing goals and activities are aligned and little conflict

Some alignment of goals and activities, but examples of working against each other

Little conflict

Poor alignment of goals and activities, and some inter-departmental conflict

Business Performance

High margins Good margins Poor margins

One critical issue is the potential benefits of collaboration. Many researchers have found that there are operational efficiencies to be gained through improved internal collaboration and outline clear benefits to interdepartmental co-operation in a number of contexts other than sales and marketing (McGee and Spiro 1988; Tjosvold 1988; Souder and Moenart 1992; Webster 1997). Child (1985) indicated that internal integration benefits the organisation through superior performance, whilst Tjosvold (1988) found that collaboration between functional groups led to improved productivity and competitiveness. Other studies have found that organisations which promote enhanced internal relationships provide superior value to the customer

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(Kohli and Jaworski 1990; Narver and Slater 1990; Morgan and Turnell 2003). There is evidence of a strong link between the internal collaboration of functional areas, greater customer satisfaction, operational efficiency and improved business performance.

Management Attitudes towards Coordination: Kahn (1996, p. 147) stated, “top management should consider programs that encourage departments to achieve goals collectively, have mutual understanding, work informally together, ascribe to the same vision and share ideas and resources” and suggested that collaboration may be facilitated by senior management uniting departmental goals. The publisher’s senior manager outlined, “I try to create a culture of co-operation between product development, marketing and sales”. The dichotomy is that although sales and marketing have a similar objective (to improve market penetration and increase sales) they are frequently set different goals by senior management. Sales are tasked with achieving short term sales targets with “hard” measures, while marketing are set longer term goals, e.g. brand building, and “soft” targets. These different goals can bring the two groups into conflict and create friction. “On the surface, the marketing-sales relationship seems symbiotic and complementary, though in practice, coordinating the two functions is rarely an easy task” (Smith, Gopalakrishna and Chatterjee 2006, p. 565).

Unless senior managers are focussed on removing barriers between sales and marketing collaboration it is unlikely that it will be achieved by itself. Piercy (2006, p. 21) noted “Without active top management support for closer cross-functional relationships, it is unlikely that they will happen”. The exploratory interviews found that the senior managers were aware of the importance of aligning activities between sales and marketing, but frequently found that the urgent need to meet sales targets meant that strategic goals were ignored. The industrial manufacturer’s senior manager stated, “Sometimes we need to sell our way out of a problem”. However, there were attempts at creating environments that supported joint working. The publisher’s senior manager noted, “We remain focussed when the goals are common. When you set out on the year, everyone has bought into where the major effort is going to be needed…. That is a collective decision so it becomes the common goal”. Senior managers need to be aware of potential areas of friction and should “formalise overlapping activities that require interfunctional coordination and should clarify roles that are mutually dependent and have potential for role ambiguity” (Menon, Bharadwaj and Howell 1996, p. 309). It is proposed that a positive management attitude towards coordination of sales and marketing goals and activities will improve collaboration between sales and marketing.

H1: A positive management attitude towards coordination between the sales and marketing functions will be positively related to level of collaboration between sales and marketing.

Communications: Prior research suggests that communications across boundaries is a key construct in the evaluation of collaboration and this variable appears relevant to the study (e.g. Griffin and Hauser 1996; Fisher, Maltz and Jaworski 1997; Yandle and Blythe 2000; Rouzies et al. 2005). Griffin and Hauser (1996) noted that functional groups are inclined to grow apart over time as they become more specialised. Specialisation can lead to difficulties in communication as each group develops an individual understanding of information in relation to their own context (Bechky 2003). Communication between sales and marketing may also be aggravated by physical separation when sales staff are field-based. Souder (1988) noted that

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frequent meetings to discuss joint involvements and sharing of information aided the establishment of collaboration. The proposition is that effective communication around customer activities and market issues will help to breakdown barriers and create common perceptions of the market. Fisher et al. (1997) propose that inter-functional communication may be improved by encouraging information-sharing behaviours. The exploratory interviews highlighted how meetings may be used to promote collaboration and how effective internal communications could help to develop cohesive strategy at operational level to create common ground between groups. The main areas of common ground between sales and marketing usually focus on customers’ activities and needs; pricing, promotional activities, new product development, and market research. There is scope to establish formal communications around the topics where there are fewer opportunities for misunderstanding. The consumer goods senior manager explained that they hold monthly meetings where managers can exchange information and set monthly targets and their Marketing Manager stated, “We work very closely together and keep each other informed at all times about what is going on”.

There is increasing evidence to suggest that frequent communication alone may become a blunt tool for improving collaboration, as too much communication may impede the quality of information exchanges (e.g. Maltz and Kohli 1996; Fisher et al. 1997). Rouzies et al. (2005) suggested that increasing the frequency of communication between sales and marketing is actually likely to damage collaboration especially if the interaction becomes acrimonious. Frequent forced communication may also lead to misunderstandings due to perception, language and/or cultural differences (Fisher et al. 1997). Research has indicated that there is greater benefit to be derived from effective (consultative or interactive) communication that creates feedback, than from frequency of communication (Fisher et al. 1997; Dawes and Massey 2005; Rouzies et al. 2005). Effective, focussed communication on market issues allow misunderstandings to be clarified and differences in perceptions to be explored. It is proposed:

H2: Effective communication between sales and marketing functions will be positively related to the level of collaboration between sales and marketing.

Interdepartmental Conflict: There is strong evidence in prior research to indicate that collaboration cannot co-exist with interdepartmental conflict (Ruekert and Walker 1987; Labianca, Brass and Grey 1998; Yandle and Blythe 2000; Dawes and Massey 2005). Interdepartmental conflict was included in the framework with the expectation that it would have a negative impact upon collaboration (as conflict increases, collaboration decreases). There are many reasons cited for the lack of co-operation between sales and marketing, including that they have strong group identities, very different philosophies and that staff often have different educational backgrounds (Griffin and Hauser 1996; Lorge 1999; Dewsnap and Jobber 2000). Yandle and Blythe (2000) indicate that the conflict between sales and marketing is primarily generated by reciprocal interdependency and that frequently senior managers believed that sales and marketing were working well together, even when they were in fact experiencing difficulties. This view was supported by the exploratory interviews, which found that two of the organisations did not have aligned sales and marketing activities and one organisation demonstrated that sales and marketing were working at cross-purposes in some areas, even though their line manager thought that their activities were closely aligned. The consumer goods Marketing Manager mentioned, “There are certain things that are going on that nobody knows about except the person


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that is doing it” and their senior manager stated, “Yes, I think that it [conflict] does exist sometimes between marketing and sales”.

Kotler et al. (2006, p. 78) noted, “senior managers often describe the working relationship between Sales and Marketing as unsatisfactory”. The basis for the friction comes from both economic and cultural sources. Sales people initiate sales and produce revenue, whilst marketing people are more creative and are a cost centre, but they frequently have to share the budget granted by senior managers (Kotler et al. 2006). Some sales and marketing departments may experience role ambiguity and a lack of understanding of each other’s functions (Cespedes 1993; Krol 2003). There have also been examples of sales and marketing teams blaming each other for sales failure (Colletti and Chonko 1997; Kotler et al. 2006) and there is evidence to indicate that they have traditionally come from different educational backgrounds (Cespedes 1993). In addition, there is frequently poor co-ordination between sales and marketing over planning and goal setting (Strahle et al. 1996; Colletti and Chonko 1997). Organisations exhibiting interdepartmental conflict between sales and marketing frequently work at cross-purposes, may be obstructive, may have incompatible goals, and do not understand each other’s roles or priorities. It is proposed that interdepartmental conflict will be negatively related to improve collaboration between sales and marketing. The hypothesis is:

H3: Interdepartmental confl ict between sales and marketing functions will be negatively related to the level of collaboration between sales and marketing.

Organisational Learning: Slater and Narver (1995) highlighted the marketing function plays a key role in establishing organisational learning through its boundary spanning functions. However, where sales and marketing are organised into two distinct groups they are likely to have developed their own language and practice, creating boundaries within the marketing function, between sales and marketing. Tacit knowledge (specific to that community) is frequently created in occupational communities and may be explicitly discussed through codification (Bechky 2003). Most groups will use a mixture of codified and non-codified language to communicate ideas and learning. Codified language and its underlying tacit knowledge may create difficulties in translating meanings between groups or communities within organisation (Oliva 2006), for example between sales and marketing. To overcome this, according to Loermans (2002) it is necessary to build a corporate architecture that provides the organisation with mechanisms that facilitate learning. This may include the creation of a common language through problem sharing activities (Carlile 2004). One method to achieve this is through the extension of community of learning from a sales group and a marketing group, to a single sales and marketing learning community through “participation, identity-construction and practice which occur within (and across) communication of practice” (Roberts 2006, p. 643). The creation of organisational learning should include information dissemination and the effective sharing of the interpretation of that information across boundaries (Slater and Narver 1995). It has been observed by Van der Vegt and Bunderson (2005, p. 534) that sharing expertise and knowledge to solve problems is an essential “source of individual and collective learning”. Creating an area of common ground may form the basis for two groups to create learning communities between sales and marketing.

The exploratory interviews indicated that there was evidence of group-specific learning in all three organisations, but that this learning was generally not formalised and shared between sales and marketing. However, the publisher had regular meetings at middle management level that included sales, marketing and production that may

617Le Meunier-FitzHugh and Piercy Drivers of sales and marketing collaboration

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promote learning through social interaction. This type of interaction may allow learning across boundaries and the development of a common language (Carlile 2004). They exchanged information at these meetings, but although there were systems to feed the learning back up the organisation, there did not seem to be any downward dissemination. Research into learning within sales groups has suggested that relational learning is highly personal, and may not be portable through conventional formalised systems, but will be more appropriately communicated through social interaction leading to the formation of learning communities (Turley and Geiger 2006). The consumer goods marketing manager said “we have an excellent relationship…we have known each other for quite sometime…and we have learnt how to support each other”.

Effective learning requires integrating concepts, knowledge and experience from multiple disciplines. Everyone in the organization is a potential contributor to learning. The challenge is creating the processes and commitment to learning.

(Cravens 1998, p. 200)

Prior research indicates part of learning is sharing knowledge that may promote successful and meaningful collaboration between sales and marketing, therefore we propose that:

H4: A commitment to organisational learning will be positively related to the level of collaboration between sales and marketing.

Market Intelligence: Jaworski and Kohli (1993) identified that market orientated organisations rely on the generation of market intelligence and the dissemination of that intelligence across all departments. The inclusion of sales in market intelligence collection and dissemination processes is relevant to establishing collaboration and improving organisational performance (Olson et al. 2001). The interviews found that all three organisations recognised the importance of including the sales force in the collection of market intelligence, but only one disseminated their market intelligence to both sales and marketing staff. The consumer goods senior manager noted, “The sales staff are the eyes and ears as far as the marketing trends are concerned”. The industrial manufacturer’s Sales Manager explained, “We all help to collect and pass information to the business support area for analysis”.

Evans and Schlacter (1985) noted that in many organisations, market information may be available but their structures and processes may fail to facilitate prompt and meaningful marketing information exchange. While research into learning between sales staff noted that many sales staff found it difficult to convey their client knowledge through conventional IT systems, they found that the informal and more personal environment of team meetings made exchanging highly contextual information easier (Turley and Geiger 2006). In the exploratory research the publisher ran a series of cross-departmental meetings to allow new information and ideas to be discussed and formulated. The industrial manufacturer was actively addressing the issue of collection and dissemination of market intelligence by appointing a business support manager to collate and analyse the data. Their Marketing Manager stated, “There are a number of people who have been collecting market intelligence including the VP Sales and Marketing and myself, and the new role would consolidate all this management information into a new database,” which will be made available to the whole department. The gathering and dissemination (sharing) of market intelligence is included as an indicator of collaboration between sales and marketing. The


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hypothesis is:

H5: Shared market intelligence between sales and marketing functions will be positively related to the level of collaboration between sales and marketing.

Business Performance: A number of writers (e.g. Tjosvold 1988; Kohli and Jaworski 1990; Narver and Slater 1990; Griffin and Hauser 1996; Morgan and Turnell. 2003) have identified a positive link between internal collaboration and business performance, but none of these specifically addressed the effect of improving collaboration between sales and marketing. Corstjens and Corstjens (1999) indicate that a lack of cooperation between sales and marketing has the potential to damage the overall success of the organisation, while other research suggests collaboration between two groups leads to “improved productivity, enhanced competence and increased confidence in work relationships” (Tjosvold 1988, p. 287). The exploratory interviews indicated that there was a link between collaboration between sales and marketing and business performance. The publisher’s senior manager explained,

I think that on the whole, if we remain focused, then the goals are common. When you set out on the year everyone has bought in on …a collective decision so it becomes a common goal. We have overriding strategic goals of growing our business, etc., which everyone has bought into, so one tries to keep a common approach. There is quite good teamwork going on.

Their senior manager continued that due to a number of factors, including high quality services that rely for effectiveness on the sales and marketing departments working closely together, their gross profits have grown to an all time high, while the least collaborative organisation studied had profit margins below their industry norm (see Table 1). We have conceptual and empirical support for the view that collaborative sales and marketing activities will be beneficial to the organisation in terms of improved business performance. The hypothesis is:

H6: Collaboration between sales and marketing functions will be positively related to business performance.

METHODOLOGY

Exploratory research was conducted with three B2B organisations and combined with themes drawn from existing literature to develop the conceptual framework (Parasuraman, Grewal and Krishman 2004). This approach was relevant because the “theory base is comparatively weak and the environment under study is messy” (Harrison 2002, p. 158). Hour long, one-to-one interviews were carried out in the three organisations with the head of sales, head of marketing, and their line manager (who were all senior managers). Senior managers were selected because they provided an overview of the sales and marketing interface and the objectives of the organisation as a whole. The interviews with the Sales Managers and Marketing Managers allowed the inter-functional relationship to be explored in more detail. The analysis of the transcripts identified the main areas of interest and provided the themes for the quantitative research (see Figure 1). In addition to the research, our study included a survey of organisations to evaluate our research hypotheses. The intent was to progress from the richness of the qualitative data collection to a more representative, multi-company test.


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Sample selection

The survey was conducted through a mailed questionnaire to large, UK-based organisations operating in the business-to-business arena. Large organisations are defined as any company whose turnover exceeds £11.2 million (Small and Medium Enterprise 2004). One thousand randomly selected wholesalers, industrial goods manufacturers, consumer goods manufacturers and publishers were included in the survey, and were selected from a list provided by a commercial agency. The multi-page questionnaire with covering letter, which offered the respondents a summary of the results upon completion, was mailed to Managing Directors/Chief Executives and a reminder letter that was sent approximately two weeks after the initial letter. A second copy of the questionnaire with supporting letter was sent approximately two weeks after the reminder letter, and a final letter was sent approximately six weeks after the initial contact (Dillman 2000).

Response rate

The survey generated 223 (22.3%) responses of which 77 were ineligible for a variety of reasons (see Table 2). The questionnaire was addressed to the Managing Director/Chief Executive of each organisation: The majority (83.6%) of the responses were completed by Senior Managers (Directors), of which 70.5% were Chairman, Chief Executive Officers, Managing Directors, Directors, or General Managers (see Table 3 for the composition of the responses). The response rate (14.6% useable responses) was within the expected response rate for surveys directed to Managing Directors/Chief Executives (Hooley, Greenley, Cadogan and Fahy 2005). A MANOVA test was carried out to assess if there was any significant difference between responses by job titles. No significant differences were found.

The turnover of the respondent organisations varied, with 52% having a turnover between £11 and £20 million, 27% having a turnover between £21 and 50 million and 21% turning over more than £50 million. Responses were received from industrial manufacturers (42%), consumer goods manufacturers (28%) and wholesalers (30%). The findings from these groups were tested with a MANOVA test and no differences were detected.

Two possible sources of sampling error were examined non-response error and non-coverage errors. Non-response bias was tested by performing multiple t-tests on the early and late responses, as outlined by Armstrong and Overton (1977), following the assumption that late respondents are more similar to non-respondents than to the early respondents. The data set was divided into two groups for testing. With the exception of business performance, the multiple t-tests yielded no significant difference between the two groups at the conventional levels (p > .05). For the business performance constructs, early responses had a significantly higher mean than late responses found we believe that this difference occurs because the less efficient/successful organisations are more likely to be those who respond later after being prompted. Nonetheless, it remains a limitation of the research that the sample may be biased towards higher performing companies. The non-coverage error was examined by comparing the characteristics of the respondents (industry type, number of employees, and turnover) with a sample of organisations randomly selected from the non-respondents and no significant differences were found between the two groups.

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Construct operationalisation

The development of the questionnaire was based upon the themes and patterns from prior research (Churchill and Iacobucci 2002). These themes were placed in a logical order and questions were selected. The majority of the questions selected for the final questionnaire were indicators and measures that had been previously developed, tested and published in other research papers (e.g. Evans and Schlacter 1985 Menon, Jaworski and Kohli 1997; Hult, Ketchen and Salter 2002). This is a practice recommended by Robinson, Shaverand and Wrightsman (1991) and Churchill and Iacobucci (2002), and it also assists with the concurrent validity of the questionnaire. For six of the constructs, our measures were replications of Likert attitude scales (1-7) used in prior research. The Appendix shows the scale items and the sources for these measures.

Existing scales could not be found for one measure (management attitudes towards coordination), so questions were developed for this area using Likert scales. According to Bryman (2001), it is important to establish that new measures have face validity and that they should reflect the concepts they are trying to measure. Moser and Kalton (1983) indicate that an appropriate way of measuring content validity would be to use the judgement of specialists in that area. To assess content validity, the initial questionnaire with the new measures were given to 25 part-time MBA students to review, and its effectiveness was discussed with a small group selected

TABLE 2 Survey response rates

TotalSample size 1000

Total number of respondents 223

Total number of usable respondents 146

Turnover too low (less than £11m) 24

No sales or marketing dept 10

Do not do surveys 13

No longer trading 25

Unusable 5

Total number ineligible respondents 77

Response Rate 14.6%

TABLE 3 Response sample composition (N=146)

%Chairman/CEO/MD/Directors/General Managers 70.5Marketing Directors /Managers/Executives 11.6Sales and Marketing Directors/Managers 6.9Sales Directors/Managers 4.8Business Development Managers 2.7Other HR Managers/Accountants/Customer Liaison Managers 3.4Total number of Senior Managers (Directors) 83.6

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from these students. MBA students were selected because they all are currently working in senior management roles. Sixteen questionnaires from this pilot survey were returned and a number of adjustments were made. Three questions had to be reworded to improve their clarity because the scales had been developed and tested in the US and the language was unclear. The questionnaire was then pre-tested by being sent to 30 Managing Directors. There were 20 responses from the pre-test, which resulted in further adjustments. Four marketing academics then independently reviewed the questionnaire, but no other changes were made.

Data analysis

Since the constructs were measured by multiple-item scales we performed reliability analyses and report the coefficient alphas in Table 4, together with the construct means, standard deviations and intercorrelations. The alphas range from .73 to .86, which is satisfactory. The relationships hypothesised between our antecedent constructs and the dependent (collaboration between sales and marketing) were evaluated using multiple regression. We checked for the presence of multicollinearity. The variance inflation factors are all below the cut-off value of 10. Moreover, all condition indices are well below the critical value of 30. On the basis of these tests, multicollinearity does not appear to be a problem. We also tested for homoscedasticity, normality, linearity, independence of residuals and outliers (Pallant 2004) and no irregularities

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TABLE 4 Correlation matrix, Cronbach alpha, mean and standard deviation

Cronbach Alpha

Mean (standard deviation)

V1 V2 V3 V4 V5 V6 V7

Management Attitudes towards Coordination (V1)

0.854.91

(1.37)

Intradepartmental Conflict (V2)

0.732.67

(0.96)-.440**

Communications (V3)

0.834.60

(1.10).452** -.287**

Organis ational Learning (V4)

0.865.62

(0.98).182* -.038 .175*

Market Intelligence (V5)

0.844.60

(1.11).499** -.352** .501** .342**

Collaboration between Sales and Marketing (V6)

0.784.99

(1.25).603** -.545** .523** .266** .581**

Business Performance (V7)

0.864.57

(1.15).336** -.282** .401** .243** .392** .467**

N = 146. *p < .05. **p < .01.

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or problems were discovered in the data. Therefore, multiple regression analysis was employed to test the data using ordinary least square analysis. We also performed ordinary least squares regression analysis to estimate the impact of collaboration on business performance as there were no problems associated with the data.

Results

The findings were analysed using correlation and multiple regression (see Tables 4 & 5). Table 4 contains the means and standard deviation of the measures. The analysis

TABLE 5 Results from the multiple regression

Direct Effect on Dependent Variables

Dependent Independent B Beta RAdjusted

R2 FSig.of F

t p


Management Attitudes towards

Coordination

.232 .260 .753 .551 36.636 .000 3.713 .000

Intradepartmental Conflict –.376 –.298 –4.711 .000

Market Intelligence .226 .216 2.983 .003

Communication .141 .168 2.517 .013

Organisational Learning .165 .133 2.240 .027

Summary of Hierarchical Regression, Analysis of Variables

Dependent Independent Adjusted R2 R2 Change F ChangeSig. F

Change


Management Attitudes towards Coordination

.355 .359 80.670 .000

Intradepartmental Conflict .447 .096 25.197 .000

Market Intelligence .522 .076 23.141 .000

Communication .539 .020 6.237 .014

Organisational Learning .551 .016 5.016 .027

Direct Effect on Dependent Variables

Dependent Independent B Beta RAdjusted

R2F

Sig. of F

t p

Business Performance


.416 .467 .467 .213 37.057 .000 6.339 .000

Notes: N = 146

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was carried out to establish the statistical relationship between each variable so that each hypothesis could be accepted or rejected.

Management Attitude towards Coordination: The results indicate that there is a strong relationship between management attitudes towards coordination and collaboration between sales and marketing. The results (see Table 4) show a high correlation between these two constructs and a significant multiple regression Beta value (see Table 5). These results confirm the view that management support for coordination of the sales and marketing functions is positively linked to collaboration levels. However, it should be noted that while a negative attitude towards coordination may be detrimental to the collaboration between sales and marketing, a neutral management attitude to coordination may not prevent collaboration existing. As the data collection was directed to Managing Directors/Chief Executives of large organisations, these results show that the majority of this group (Table 4) consider it important to address collaboration of sales and marketing functions through alignment of goals, and coordination. On this basis, hypothesis H1 is accepted.

Effective Communications: The establishment of frequent and effective communications between sales and marketing functions through meetings and other exchanges were considered relevant to collaboration between sales and marketing. The results found that there was a high correlation of .523 (see Table 4) between the two constructs. The multiple regression analysis was also significant (see Table 5), indicating that effective, focussed communication is a significant element in collaboration. If sales and marketing are not communicating with each other they may be unable to collaborate because they cannot share ideas, values and information. Communications are significant as misunderstandings may be reduced (Fisher et al. 1997). Communication may be established through electronic means or informally even outside the work environment, but the concept of exchanging information on market needs, competitor activities and customer information appears fundamental to a collaborative sales and marketing environment. The strength and direction of the relationship between communication and collaboration between sales and marketing means that hypothesis H2 is accepted.

Interdepartmental Conflict: Low interdepartmental conflict is proposed to be important to collaboration between sales and marketing. These two constructs have a negative correlation (see Table 4) and a significant multiple regression Beta value (see Table 5). This displays one of the strongest relationships in the results. Although conflict has been shown by research to have some positive effects in the form of competitive rivalry (e.g. Barclay, 1991), in this case, it is believed that interdepartmental conflict between sales and marketing has no positive side effects. There have been many differences identified between the values and goals of sales and marketing, and any additional conflict or friction between these two functions is likely to damage their relationship (Dawes and Massey 2005). Our results suggest increasing levels of conflict may adversely affect the sales and marketing relationship and their ability to collaborate successfully. On this basis hypothesis, H3 is accepted.

Organisational Learning: There is prior research to indicate that a commitment to organisational learning creates superior value for customers (e.g. Slater and Narver 1995; Morgan and Turnell 2003) and it was proposed that learning would have a positive impact on collaboration between sales and marketing, by generating new knowledge that could then be shared and used to improve customer value. The results show positive correlation between these two variables (see Table 4). The multiple regression analysis had a Beta value of .133 and the effects of organisational learning increased the overall adjusted R2 of collaboration between sales and marketing (see

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Table 5). In addition, the descriptive statistics found that organisational learning (see Table 4) was considered to be an important element of sales and marketing success by Managing Directors/Chief Executives. Organisational learning has a positive impact on collaboration between sales and marketing and hypothesis H4 is accepted.

Market Intelligence: The rationale for including this variable is that market intelligence may be more effectively used to the benefit of the organisation if it is jointly gathered and shared between sales and marketing. If organisations were sharing marketing information, this would be an indication that they are being collaborative. There is prior research to show that sales staff will withhold market intelligence if they believe that the information is not being included in the marketing planning process (Homburg, Workman and Jenson 2000). The research found a high correlation between market intelligence and collaboration between sales and marketing (see Table 4) and a significant multiple regression Beta value (see Table 5) and hypothesis H5 is accepted.

Collaboration between Sales and Marketing: Both the prior research and our exploratory interviews indicated that improved performance should result from effective collaboration between sales and marketing, but there was little empirical evidence to support this proposition. The correlation analysis found a positive correlation between collaboration between sales and marketing (see Table 4) and a significant Beta value (see Table 5). Both analyses found a significant positive relationship between collaboration between sales and marketing and business performance and hypothesis H6 is accepted.

DISCUSSION AND IMPLICATIONS

This study began with the observation that the sales and marketing interface is still under review as it exhibits many signs of interdepartmental conflict (e.g. Dewsnap and Jobber 2000; Rouzies et al. 2005). There continues to be confusion about the appropriate relationship between these two groups (Webster 1997), with some researchers supporting their integration (Rouzies et al. 2005) and others suggesting that sales and marketing are required to remain separate functions with necessarily different cultures and practices (Shaprio 1997; Homburg and Jensen 2007). Therefore, we propose that sales and marketing should be encouraged to collaborate rather than integrate activities into one department (Le Meunier-FitzHugh and Piercy 2007), build links on areas that are mutually beneficial, to understand each others function within the organisation structure and how their activities can support each other. The critical effort should be on management attitudes (aligning activities and establishing mutual understanding), and creating a joint marketing intelligence system, with underlying focus on improving effective communications and organisational learning. These actions should also help to reduce interdepartmental conflict.

The study carried out a review of the possible antecedents to sales and marketing collaboration to clarify the factors that may influence the interface and these antecedents require managerial attention. We have also extended existing research by empirically testing the factors that influence the relationship between the sales and marketing functions and business performance (see Figure 1). The research results confirm that management attitudes towards coordination demonstrate the strongest relationship with collaboration between sales and marketing. This suggests that it is relevant for senior management to focus on improving this interface by aligning goals and creating opportunities for sales and marketing to collaborate. Managers should

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encourage shared vision and an understanding of each department’s role in achieving organisational goals.

A further factor that demonstrates a strong influence on collaboration between sales and marketing is interdepartmental conflict. The reduction of interdepartmental conflict requires sales and marketing to align their activities, work together and decrease tension. The promotion of effective communications between sales and marketing, rather than simply an increase in the frequency of contact, will also improve their collaboration. Effective communications may be achieved through both formal and informal methods, as well as through electronic media or face-to-face contact, but for communications to be effective it should be focussed on information sharing and target setting activities. The important point is that effective, focussed communication (with feedback) should be promoted, rather than simply increasing frequency on contact.

Organisational learning displays the weakest relationship with collaboration between sales and marketing. However, the study indicates that finding areas of common ground to facilitate sharing knowledge and skills not only promotes collaboration, but also improves communication. The development of an inclusive market intelligence system encourages sales and marketing staff to jointly contribute marketing data, discuss findings and to share the results, which promotes collaborative working. Market intelligence is the last identified antecedent to collaboration between sales and marketing, and exhibits one of the strongest relationships with improving collaboration. This study has provided evidence that improvements in collaboration between sales and marketing have a positive affect on business performance.

Limitations and future research

We would like to indicate that there may be several limitations to this study. First, although a number of industries were included in the sample thereby providing generalisability, this research only examines the sales and marketing interface in large, UK organisations so there are opportunities for further research to consider the sales and marketing interface in small and medium sized organisations, as well as those operating outside the UK. Second, the questionnaire was targeted at senior managers and did not explicitly solicit the views of sales and marketing staff. It should therefore be highlighted as a possible area of bias and future research should consider either using matched pairs or pooling sales and marketing managers’ responses with those of senior managers’ to provide dyadic data upon the sales and marketing relationship within the organisation.

The measure for business performance may have caused a further limitation as it was based on the opinions of the Managing Director/Chief Executive of the organisation who were asked to rate the organisation’s performance against a range of targets. However, a number of other researchers have used similar scales to measure business performance (e.g. Craven, Ingram, LaFord and Young 1993; Jaworski and Kohli 1993; Morgan and Turnell 2003) and Menon et al. (1996:305) observed, “Although objective performance measures may have been more ideal, research evidence points out that managerial assessments of financial and marketing performance are consistent with objective measures”.

This research has confirmed a number of antecedents to collaboration between sales and marketing and highlights the general implication that improvements in the sales and marketing interface can only be carried out through changes in the managerial systems as well as attitudes and behaviours. This study provides opportunities for a number of future research directions. Confirmatory research could be conducted

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using a longitudinal, in-company study to measure the improvement to the sales and marketing relationship when these techniques are applied. Future research should explore the underlying factors preventing collaboration between sales and marketing being realised, as well as considering how the antecedent factors (at different levels) interact with each other, as well as other mediating and moderated relationships among the key constructs. A further line of research may be developed in the area of the intra-relationship between product development, marketing and sales. Sales and marketing may be able to communicate through project work, for instance in product development, involving themselves in each others’ activities, and perhaps creating active learning.

Management implications

This study highlights some of the difficulties experienced between sales and marketing departments and identifies some of the mechanisms that senior management can consider utilising to improve the relationship. It also underlines the importance of managers promoting collaboration between sales and marketing rather than integration of activities. Accepting that sales and marketing are two discrete functions with their own targets and goals it is easy to understand why sales and marketing have developed into two culturally different entities who work as well together as any other independent departmental groups. The difficulty is that sales and marketing are interdependent and have the same overall objective, therefore managers (customers and other parts of the organisation) may assume that they are working symbiotically and this is not always the case. Managers should be able to evaluate the interface and identify gaps or areas that may be improved. This study provides a checklist that senior managers may use to do this.

Firstly, senior management should be able to evaluate and understand the complexity of the relationship between sales and marketing, and be aware of the strong group identities that they have developed. These group identities underline the necessary differences between the employees operating in the two areas. Senior managers also need to appreciate strong group identities/culture play a key role in the success of sales and marketing departments and work to forge links that promote collaboration between sales and marketing without undermining their essential uniqueness. Senior managers are also in a position to reduce interdepartmental conflict between the two groups by ensuring that their goals and their activities are aligned. Part of this would be to establish opportunities for formal communications through regular and focussed meetings and by promoting both frequent and informal communication through targeted interaction between the two groups. This may be achieved through the introduction of a robust market intelligence system that encourages sales and marketing to build and share market information. Both sales and marketing staff should be able to contribute to market research and whether it is processed by sales, marketing or a third party, it should be disseminated back to both groups and form the basis of developmental discussions.

Regular meetings and shared market intelligence should help to establish organisational learning and widening the learning communities through sharing good practice as well as helping to set joint targets and goals. Managers should be able to facilitate organisational learning across boundaries to assist sales and marketing staff to understand each others roles and priorities, thereby reducing interdepartmental conflict further. The overall outcome of improving collaboration between sales and marketing should be improved business performance, customer satisfaction and profits.

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Yandle, J. and Blythe, J. (2000), “Intra-Departmental Conflict Between Sales and Marketing: An Exploratory Study”, The Journal of Selling and Major Account Management, Vol. 2, No. 3, pp. 3-31.

APPENDIX

Scale Items for construct measures

Construct Items Adapted fromManagement Attitudes

towards Coordination1 = Not at all7 = To a great extent

• Senior management ensures that the sales and marketing goals are closely aligned.

• To what degree does senior management ensure that the activities of the sales and marketing departments are well coordinated?

New Scale

Intradepartmental Conflict

1 = Strongly disagree7 = Strongly agree

• Sales and marketing get along well with each other. (Reversed)

• Sales and marketing generally dislike interacting with each other.

• When members of sales and marketing get together, tensions frequently run high.

•Sales and marketing feel that the goals of their respective departments are in harmony with each other. (Reversed)

• The objectives pursued by the marketing department are incompatible with those in the sales department.

• There is little or no interdepartmental conflict between sales and marketing. (Reversed)

Menon, Jaworski and Kohli (1997)

Communications 1 = Strongly disagree7 = Strongly agree

• We have interdepartmental meetings at least once a quarter to discuss market trends and developments.

• Marketing personnel spend time assessing customers’ future needs with the sales department.

• Sales and marketing get together periodically to plan responses to changes taking place in our business environment.

Kohli, Jaworski and Kumar (1993)

Organisational Learning


• We believe that the sales and marketing process is improved through learning.

• Our future sales and marketing success is at risk if we stop learning.

• Our ability to learn is key to improving sales and marketing processes

Hult Ketchen Jr. and Slater (2002)

Cont’d...

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Construct Items Adapted fromMarket Intelligence1 = Very infrequently7 = Very frequently

• How frequently does the organisation use sales as a source of information?

• How frequently does the organisation feedback on the use of the market information from sales?

• How frequently does the organisation use marketing information as part of sales performance evaluation?

Evans and Schlacter (1985)


• Marketing personnel spend time discussing customers’ future needs with the sales department

• There is a lot of communications between marketing and the sales department concerning market development.

• When the sales department finds out something important about customers, it is quick to alert other departments.

Sinkula, Baker and Noordewier (1997)



• A team sprit pervades sales and marketing• Sales and marketing share the same goals

Hult Ketchen Jr. and Slater (2002)

Business Performance1= Needs improvement7 = Outstanding

• How successful is the organisation at generating a high level of sales revenue?

• How successful is the organisation at generating high market share?

• How successful is the organisation at selling those products with the highest profit margins?

• How successful is the organisation at exceeding all sales targets and objectives during the year?

• How successful is the organisation at generating sales of new products?

• How successful is the organisation at producing sales with long-term profitability?

Behrman and Perreault (1982)

ABOUT THE AUTHORS AND CORRESPONDENCE

Ken Le Meunier-FitzHugh is a Lecturer in Marketing at Norwich Business School, University of East Anglia. He obtained a PhD in Marketing and Strategic Management from Warwick Business School, The University of Warwick. Prior to undertaking an academic career, he spent 20 years working in sales and marketing at senior levels for a range of organisations. His research interests focus on exploring the interface between sales and marketing and he has a number of publications in academic journals.

Corresponding author: Dr Kenneth Le Meunier-FitzHugh, Norwich Business School, University of East Anglia, Norwich, NR4 7TJ, UK.

T +44 (0)1603 456161 F +44 (0)1603 458553 E [email protected]

Nigel F. Piercy is Professor of Marketing and Strategy, Warwick Business School, The University of Warwick. He holds a PhD from the University of Wales and a

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higher doctorate (DLitt) from Heriot-Watt University, Edinburgh. His current research interests focus on strategic sales and account management. His work has been published in many journals including the Journal of Marketing, the Journal of International Marketing and the Journal of the Academy of Marketing Science. He is co-author to David Cravens on Strategic Marketing, 9th edition, published by Irwin/McGraw-Hill in 2008.

Professor Nigel F. Piercy, Warwick Business School, The University of Warwick, Coventry, CV4 7AL, UK.

T +44 (0)2476 523911 F +44 (0)2476 524628 E [email protected]

Le Meunier-FitzHugh and Piercy Drivers of sales and marketing collaboration

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Documents

Drivers of sales and marketing collaboration in business-to-business selling organisations