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Is the Marketing Department Losing Influence?

In my last post (Is Marketing in Decline?) I talked about “The Decline and Dispersion of Marketing Competence” by Frederick E. Webster Jr., Alan J. Malter, and Shankar Ganesan published in the Summer 2005 issue of MIT Sloan Management Review.

As promised, in this post I’ll talk about a 2015 paper on a closely-related topic.  The paper is “The Loss of the marketing department’s influence: is it really happening? And why worry?” by Christian Homburg, Arnd Vomberg, Margit Enke, and Philipp H. Grimm, published in the January 2015 issue of the Journal of the Academy of Marketing Science.

I’ll start by saying that the paper should be required reading for every business person, not just every marketer.  The issue is of critical importance and the authors do an excellent job bridging the academia-practice divide.  In addition it is very readable and fairly short (12 pages).

Here’s the executive summary: Referring to the two questions posed in the title, the authors’ conclusions are 1. Yes, and 2. Because business performance is going to suffer as a result.

I agree with both conclusions but I do not completely agree with the authors on what to do about it (see below).

Here is a more detailed discussion:

The paper actually addresses three very important questions:

  • Is the marketing department losing influence?
  • If so, which department(s) have benefited?
  • What are the business performance implications of the relative influence of the Marketing, Sales, R&D, Operations and Finance departments?

The reason I say that this paper is a must-read is that it is current, it addresses these very important questions, and it evaluates the changes over a significant but still relevant time period.  It does so by comparing marketing’s influence in 2013 to its influence in 1996 by building on the work of Homburg, Workman, and Krohmer “Marketing’s Influence Within the Firm” published in the April 1999 issue of the Journal of Marketing.

Regarding the first two questions the conclusions are that the marketing department has indeed lost influence, and it is the sales department that has benefited.

Regarding the final question it’s important to note that business performance was evaluated in two ways: Financial Performance and Customer Relationship Performance.  With that in mind the conclusion was that the shift in influence from the Marketing department to the Sales department was detrimental on both counts.  Another interesting finding was that the other three departments do not have much influence on either aspect of business performance.

The paper includes commentary on what might be responsible for marketing's loss of influence, and I agree with nearly all of it.  Where I disagree with them is on the major managerial implication.  I also disagree with them on two of their three suggested approaches to remedy the situation.

The authors cite the following major implication:

  • Managers should increase the influence of the marketing department.

And, they suggest the following three potential approaches to remedy the situation:

  • Staff the marketing department with people who have competence in strategic decisions and pricing issues.

  • Demonstrate the value of marketing programs.

  • Ensure top management support for marketing by increasing marketing accountability.

On the surface, concluding that the major implication of the findings is that managers should increase the influence of the marketing department seems obvious.  However, I disagree with it because the word "department" is included. I think it is possible (and preferable) to increase the influence of marketing rather than the marketing department.  As a result it might be possible that the implication is that management should increase the influence of marketing.

While I strongly agree with their first suggested remedy, the second two have received intense focus by both academics and practitioners over the past 15 years and yet the marketing department has lost influence nonetheless.  This casts doubt on their viability as effective remedies for the future.

In my next post I’ll talk more about this paper and I’ll focus on why I think marketing has lost influence and what I think should be done about it.

— R. Davis

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