According to Hair et al. (2010, 637) exogenous variables can be regarded as the latent multi-item equivalent of independent variables. In our research model the independent variables, which are not explained by any other variables in the
model (Hair et al. 2010, 637) concern: innovativeness, market orientation, organizational structures, short-term orientation, competitive intensity, reputational assets, and the control variable marketing budget. As mentioned earlier in this chapter, all of the independent variables were measured with previously validated scales, except the variable of marketing budget. All of the independent variables, with the exception of marketing budget, were anchored on a seven-point Likert scale ranging from 1 (“strongly disagree”) to 7 (“strongly agree”). The variable of marketing budget was measured by one question, in which the respondent chose one option among nine alternatives. Finally, in order to control for whether respondents had read the statements, some of the
independent variables contained a reverse-scored item.
Notice, we present the measures as the original items previously applied by other researchers. In the appendix 3 we present the formulation of items in Norwegian, as they were used in the final questionnaire.
3.4.2.1 Innovativeness
The construct of innovativeness was measured by five items (table 3.7), as in accordance with Santos-Vijande et al. (2013), adapted from Hurley and Hult (1998). The work of Santos-Vijande et al. (2013) focus on knowledge-intensive business services that provide professional services. Consequently, in the final questionnaire the wording for the item Inno4 was rephrased to contain offerings of products that manufacturers make. However, it is rare to find a manufacturer that purely delivers FMCG, without any services available to the end-consumer (e.g.
customer services), therefore we also included this aspect in the item, i.e.
“services/products”.
Table 3.7 Questionnaire items for innovativeness
Item Item Statement Source
Inno1 The firm willingly accepts innovation proposals.
Santos-Vijande et al.
(2013); Hurley and Hult (1998).
Inno2 Management is actively seeking innovative ideas.
Inno3 Innovation is not perceived in our firm as something too risky and to be avoided.
Inno4
Our firm does not penalize those employees who promote and develop ideas for new services but which ultimately do not succeed in the market.
Inno5 The development of innovations is a fundamental part of the culture of our firm.
3.4.2.2 Market Orientation
The measurement of market orientation has previously emphasized the dimension of reactive market orientation. Yet more recently, an additional dimension is highlighted - i.e. proactive market orientation (Narver, Slater, and MacLachlan 2004, 336). In this research, we measure market orientation as a two-dimensional construct that consists of proactive market orientation, and reactive market orientation - as in accordance with the research of Narver, Slater, and
MacLachlan (2004). Santos-Vijande et al. (2013), which refer to the study of Olsen and Sallis (2006), adopt this two-dimensional approach to market orientation.
The proactive dimension concerns aspects of industry foresight and customer insight, and where the focus is on exploration to identify latent needs of the current and potential customers, and new emerging markets (Santos-Vijande et al.
2013; Olsen and Sallis 2006; Narver, Slater, and MacLachlan 2004). On the other hand, the reactive dimension is about understanding and satisfying customers’
expressed needs (Santos-Vijande et al. 2013; Olsen and Sallis 2006; Narver, Slater, and MacLachlan 2004). In our research, both of these dimensions follow a seven-item scale (table 3.8 and table 3.9). Originally, the scale of proactive market orientation encompassed an eight-item scale (Narver, Slater, and MacLachlan 2004), but as one of the statements was purely applicable to a B2B-setting, it was deleted as our focus was on a B2C-setting.Thus, notice that in table 3.8 only seven items are presented.
Table 3.8 Questionnaire items for proactive market orientation
Item Item Statement Source
P_M_O1 We continuously try to discover additional needs of our customers of which they are unaware.
Santos-Vijande et al.
(2013); Narver, Slater, and MacLachlan (2004);
Olsen and Sallis (2006).
P_M_O2 We incorporate solutions to unarticulated customer needs in our new products and services.
P_M_O3 We brainstorm on how customers use our products and services.
P_M_O4 We innovate even at the risk of making our own products obsolete.
P_M_O5 We search for opportunities in areas where customers have a difficult time expressing their needs.
P_M_O6
We work closely with lead users who try to recognize customer needs months or even years before the majority of the market may recognize them.
P_M_O7 We extrapolate key trends to gain insight into what users in a current market will need in the future.
Table 3.9 Questionnaire items for reactive market orientation
Item Item Statement Source
R_M_O1 We constantly monitor our level of commitment and orientation to serving customer needs.
Santos-Vijande et al.
(2013); Narver, Slater, and MacLachlan (2004);
Olsen and Sallis (2006).
R_M_O2
We freely communicate information about our successful and unsuccessful customer experiences across all business functions.
R_M_O3 Our strategy for competitive advantage is based on our understanding of customers’ needs.
R_M_O4 We measure customer satisfaction systematically and frequently.
R_M_O5 We are more customer-focused than our competitors.
R_M_O6 I believe this business exists primarily to serve customers.
R_M_O7 Data on customer satisfaction are disseminated at all levels in this business unit on a regular basis.
3.4.2.3 Short-Term Orientation
In order to measure the construct of short-term orientation, we adopted the scale developed by Marginson and McAulay (2008). Building on the highly cited article by Laverty (1996) that specifically discusses short-termism with its implications for management practice, Marginson and McAulay (2008, 279-280) highlight the necessity of incorporating direct and indirect measures of time in relation to short-term orientation. The direct measures of time concerns the intertemporal choice - reflecting the decision makers’ reference points in relation to time (Marginson and McAulay 2008, 279). The indirect measures involve expectations of short-term goal achievement, and adaptation through innovation and learning (Marginson and McAulay 2008, 280). In total, this study applies the seven-item scale that covers these two aspects of short-term orientation - where the first two items represent the direct measures, and the latter five items represent the indirect measures (table 3.10). Among the items measuring the construct of short-term orientation, S_T_O1, and S_T_O3 are reverse-scored.
Table 3.10 Questionnaire items for short-term orientation to reduce variances from budget, but not at the expense of disrupting ongoing programs and projects.
3.4.2.4 Organizational Structure
With a diversity of sub-dimensions for organizational structure, we partially follow and are guided by the research by Nahm, Vonderembse, and Koufteros (2003), as some of the investigated aspects are considered highly relevant for this study, i.e. formalization, horizontal integration, centralization, and
communication. Even though we follow this framework for organizational structure, other previously validated scales are applied due to its relevance and adaption to the marketing organization, and how marketing activities are
organized, and followed. Additionally, specialization is included as a construct, due to its high relevance in how to carry out complex marketing tasks (Vorhies and Morgan 2003).
3.4.2.4.1 Centralization
For this study we adopted the scale from Aiken and Hage (1966) as it incorporates the most important aspect of centralization that we wanted to measure,
i.e. “hierarchy of authority”. This means that after tasks are delegated, employees have the power to put them into effect without being limited by managers. Based
on the purpose for this study, we did not incorporate the other aspect of
centralization emphasized by Aiken and Hage (1966, 498), i.e. participation in decision-making. Even though it can be interpreted as a possible weakness, we did not evaluate measures concerning participation in decision-making of overall goals and policies of a firm to be relevant for this study. We applied four out of five items (table 3.11) to measure “hierarchy of authority” (Aiken and Hage 1966). In collaboration with our supervisor, item four was deleted as it was deemed excessive.
Table 3.11 Questionnaire items for centralization
Item Item Statement Source
Cent1 There can be little action taken here until a supervisor approves a decision.
Aiken and Hage (1966).
Cent2 A person who wants to make his own decisions would be quickly discouraged here.
Cent3 Even small matters have to be referred to someone higher up for a final answer.
Cent4 Any decision I make has to have my boss' approval.
3.4.2.4.2 Formalization
On the topic of how rules and procedures either “reduce or encourage creative, autonomous work and learning” (Nahm, Vonderembse, and Koufteros 2003, 285), we needed a specific scale that primed the respondent to evaluate the rules and procedures for the marketing work and related activities. Andrews and Smith (1996) highlight the importance of creativity in the development of marketing programs that helps in the process of developing differentiation, and which is highly important in a purchase situation characterized by consumers exposed to competing products. It is evident that also a situational factor, such as
formalization during the planning process, contributes to creativity in marketing programs (Andrews and Smith 1996, 183). As marketing programs and planning are some of the major responsibilities and tools for marketers to successfully impact brand awareness and knowledge among consumers - we chose to adopt the scales from Andrews and Smith (1996), and Vorhies and Morgan (2003). More specifically, we adopted three items from Andrews and Smith (1996), and one item (Formaliz3) from Vorhies and Morgan (2003). In collaboration with our supervisor, the latter item was included as it captures the main topic of
formalization with its “written rules and procedures”, that we considered essential
Table 3.12 Questionnaire items for formalization
Item Item Statement Source
Formaliz1 In my company, marketing plans have a specific format that is used by everyone.
Andrews and Smith (1996); John and Martin (1984); Vorhies and Morgan (2003).
Formaliz2 We have clearly defined procedures for completing each section of the marketing program.
Formaliz3 Most people in the marketing organization follow written work rules for their job.
Formaliz4 We have a precise timetable for completing marketing plans.
3.4.2.4.3 Specialization
To evaluate the construct of specialization, we adopted the four-item scale (table 3.13) from Vorhies and Morgan (2003). These measures are regarded as highly relevant and specific in how marketing activities are divided. More specifically it concerns how marketing activities are delegated among employees based on skills and knowledge. Notice, Spec3 is reverse-scored.
Table 3.13 Questionnaire items for specialization
Item Item Statement Source
Spec1 Marketing personnel in this firm have very specific job responsibilities.
Vorhies and Morgan (2003);
Doty, Glick, and Huber (1993).
Spec2 Most marketing employees have jobs that require special skills.
Spec3 Standardized training procedures exist for marketing jobs (r).
Spec4 Written position descriptions are provided to marketing specialists.
3.4.2.4.4 Horizontal Integration
Four items from Nahm, Vonderembse, and Koufteros (2003) were adopted (table 3.14). As this construct deals with how different departments and functions are possibly integrated with each other, we wanted to treat this construct on a broad term, and how work-teams are brought together. Originally this construct consisted of six items, but due to very similar wordings we decided to exclude two items - thus four items are presented in table 3.14.
Table 3.14 Questionnaire items for horizontal integration
Item Item Statement Source
H_i1 Our tasks are done through cross-functional teams. Nahm, Vonderembse, and Koufteros (2003);
H_i2 Our workers are assigned to work in cross-functional teams.
H_i3 Our workers are trained to work in cross-functional teams
H_i4 Our managers are assigned to lead various cross-functional teams.
3.4.2.4.5 Communication
The items from Nahm, Vonderembse, and Koufteros (2003) were also applied for this construct, as it takes the broader scope of how communication flows both in a hierarchical and horizontal manner. For the purpose of this study, it is important to include an overall perspective as the marketing function needs to be effectively coordinated with other departments to ensure that important customer data are communicated and transmitted across functions, e.g. the departments of customer service and sales. The construct originally consisted of five items, but was
narrowed down to four (table 3.15). The last two original items were collided into item C4, as they both concern whether employees can easily contact the level above in the hierarchy, i.e. “communicate/meet”.
C3 Strategic decisions are quickly passed on to relevant work groups.
C4
It is easy for the different levels in hierarchy to meet/communicate with each other (e.g. between employees and management or between middle managers and senior managers).
3.4.2.5 Reputational Assets
In order to measure the construct of corporate reputation, we applied the scales by Brown (1995) that operationalized the six-item scale from Levitt (1965). In this context, corporate reputation is captured from the buyer’s perception - involving a number of attributes regarding whether the firm is best or worst,
Accordingly, respondents evaluated these attributes on a seven-point scale, where the two extremes imply the following; 1 = a poor reputation, and 7 = a good reputation. However, it should be noted that item one, i.e. R_A1, is reverse-scored. In addition, item six was deleted as it was regarded as very similar in nature with the remaining items. Thus, the final scale measuring corporate reputation consists of five items (table 3.16).
Table 3.16 Questionnaire items for reputational assets
Item Item Statement Source
R_A1 The very best – The very worst (r)
Brown (1995); Levitt (1965).
R_A2 The least reliable – The most reliable R_A3 The least reputable – The most reputable R_A4 The least believable – The most believable R_A5 Not at all known – The best known
3.4.2.6 Competitive Intensity
The construct of competitive intensity has been measured in various contexts. As we specifically wanted to look at this topic in relation to the BMS, we chose to follow the research by Auh and Menguc (2007) that incorporates the aspect of advertising. The six-item scale (table 3.17) was originally measured with a five-point Likert scale, but was transformed to a seven-five-point Likert scale in order to be similar with the other constructs in this thesis. This transformation also makes interpretation of the results easier. The competitive intensity scale items assess the competitors’ behaviors, resources, and ability to differentiate in the market
(Jaworski and Kohli 1993, 60). The last item in the scale, i.e. C_I6, is reverse-scored as it captures a low level of competition.
Table 3.17 Questionnaire items for competitive intensity
Item Item Statement Source
C_I1 Competition in our industry is cut-throat.
Auh and Menguc (2007);
Jaworski and Kohli (1993).
C_I2 There are many promotion wars in our industry.
C_I3 Anything that one competitor can offer, others can match easily.
C_I4 Price competition is a hallmark of our industry.
C_I5 One hears of a new competitive move almost every day.
C_I6 Our competitors are relatively weak (r).
3.4.3 Control Variable