The short-term and long-term impact of marketing related factors on business performance

Marketing discipline has suffered from the lack of the effective assessment methods for a long time. This has had several negative consequences for the discipline. Low level of marketing accountability is one of the main outcomes. This has led to the lack of justification abilities of the marketing budgets and expenses by the marketing professionals. As a consequence, the difficulties arise regarding the establishment of a marketing-finance interface due to the lack of justification abilities of marketing budgets. Hence, this outlook of marketing discipline caused a negative impact on the marketing credibility. Thus, all these inferences result in the decreasing authority of marketing department in the organizations. However, marketing department is one of the key strategy builders of a company. With the right and effective management of the marketing strategy, the financial outlook of a firm can change dramatically. For this reason, marketing has had to improve its accountability abilities with the new assessment approaches and display its real added-value to the company. For all these reasons, marketing literature has focused on the marketing performance and marketing performance assessment topics with the support of Marketing Science Institute who identified marketing productivity among its research priorities. The marketing performance assessment approaches aim to explain the relationships between the marketing efforts and the business performance with the financial and market-based indicators. This examination is done by using appropriate marketing metrics to generate valuable insights of the marketing's impact on performance. Based on the resource-based view, marketing productivity chain can be expanded with inclusion of the marketing resources with the aim to examine the impact of the resources on the business performance. In addition, there is the fact that marketing efforts first influence consumer minds, and just after that, the market-based performance and financial performance occur as an outcome of this impact. Therefore, the marketing productivity chain examines the consumer mind as an individual stage. Hence, the total marketing productivity chain would look like starting with the marketing resources and the marketing efforts, then analyzing the impact on the consumer mind and ultimately interpreting the market performance and financial performance as the indicators of business performance. The measures used in the marketing performance assessment methods has been adapted according to the perspective of the marketing domain. The domain of marketing has practiced several changes in its lifetime. First started with the distribution and exchange of the goods in the beginning of 1900s, the domain has been affected by different schools and evolved according to the changing approaches. Services marketing is one of the relatively recent approaches in marketing and started to appear in the literature from 1980s onwards. The service dimension holds a crucial importance for the marketing discipline, so is the service dominant logic. Therefore, conducting the marketing performance assessment from the service perspective has gained an increasing importance. With this new approach, the focus of the marketing scholars has moved from product marketing to the topic of services marketing. Hence, the interest of the authors has changed from the goods-oriented to the relationship-oriented exchanges. This change has affected the marketing performance assessment approaches in terms of the metrics used. With an increasing importance of the relationships, the non-financial and market-based metrics become more important than the financial metrics. Hence, the researchers tend to give more space to these metrics in their marketing performance assessment studies. As mentioned above, measurable marketing is crucial for creation of a successful marketing strategy. Therefore, the aim of this study is to examine the impact of the marketing resources and the marketing activities on the business performance indicators through customer-based brand equity. Hence, the empirical part of this study presents a model representing a marketing productivity chain starting from resources and marketing activities and ending with business performance indicators. With this chain of marketing productivity, this model aims to provide a deep insight regarding the effects of marketing actions from short-term and long-term perspectives. With these goals, the expected contributions of this study are as follows. First, this model can be a tool which can be used in the development of the most effective marketing mix consisting of the proper marketing activities. Hence, a perfect marketing mix can be established according to the outcomes of the model. Second, the right level of marketing budget with proper dedication for each marketing activity can be created with the help of this model. Hence, this model will contribute to the management of the marketing budget which can be improved with proper budget allocation decisions for each of the marketing activities. Most importantly, this model aims to help to build a right marketing strategy and highly contribute to the success of this strategy. This study focuses on services industry, more specifically on the banking sector in Turkey due to several reasons. First, when the studies in services industry are examined, it is recognized that the differences about marketing performance assessment in services industry is not examined in detail. Hence, this study aims to contribute to this area of marketing literature. Second, banking is a quite competitive sector. Therefore, banks are very active in their marketing actions in order to obtain a competitive position in this sector. Especially, their advertising budgets have increased to huge volumes. Hence, these big budgets need to be managed very carefully with an aim to apply the most effective and efficient marketing strategy with a long-term perspective. Therefore, this study provides a long-term perspective for the marketing performance assessment of the banking industry with the usage of panel data. Third, there are several studies examining the marketing productivity chain in the marketing literature. However, there is not any study examining banking industry through the whole chain starting from resources until the business performance. Therefore, this study will be a contribution by introducing a different perspective for the services marketing. This study consists of two main stages: the preliminary stage and the main study. The preliminary stage includes the individual interviews with senior managers of five banks in order to discover their opinions about the banks, representative of the population, the availability and the perceived importance of marketing related resources. The main study consists of conducting analyses to test the relationships in the proposed sequence within the productivity chain context. The analyses are based on panel data consisting of four years between 2012-2015, in a quarterly basis. The data has been obtained from three data sources; namely, from GfK Turkey, Nielsen Turkey, and the Banks Association of Turkey. Before conducting the analyses, the data have been consolidated and processed by the researcher according to the requirements of the analyses methods. The analysis consists of four steps. The first step included the Factor analysis in order to obtain customer-based brand equity in SPSS 20 program. The rest of the analyses are conducted in EViews 9 program. The second step includes the unit root tests in order to determine whether the variables are stable or evolving. The third step includes the regression analyses to determine the short-term and long-term relationships between the variables. But, only the significance level of the short-term coefficients can be obtained with this test. Therefore, in order to define the significance level of the long-term coefficients, Wald test is conducted as a fourth step of the analysis. The results indicate that the impact of the marketing resources, marketing activities, and the customer-based brand equity on the business performance change according to the length of the response period in the banking industry. Hence, there are differences in terms of the impacts of the marketing resources and the marketing activities on the business performance indicators both in the short term and long term. The same comment is also relevant for the impact of all marketing related inputs on brand equity. These differences include the changes in the impact either in terms of its direction, or it becomes significant or insignificant through the time. Hence, this result is an important knowledge when building the marketing strategy based on the marketing resources and the marketing activities. In addition, the results also confirm that the customer-based brand equity is one of the most effective factors on the business performance indicators. Therefore, the banks should make investments to improve their brand equities. In addition, the results show that the pricing mark-up and the number of the branches are the other most effective factors on the business performance indicators in the banking industry. Additionally, the results indicate that the impacts of different advertising media have differences in terms of their impacts on the customer-based brand equity and business performance indicators. While the impacts of the advertising media are changing from one business indicator to another, it would not be wrong to conclude that the cinema advertising is one of the most effective tools in terms of the all business performance indicators used in this study and the customer-based brand equity in the banking sector. To sum up, this study will contribute the banking industry in terms of providing the knowledge of the potential impacts of their marketing resources and marketing activities on their business performance indicators as well as on their brand value with the insight of the response time. This will enable the banks to create the right portfolio in terms of the marketing mix elements which will lead to the creation of the successful marketing strategy. In addition, having the guidelines on the importance of the marketing resources and the marketing activities in terms of the response times and the potential impacts will also lead to the superior management of the marketing budget with clear allocation guidelines. Thus, this study can be treated as a comprehensive tool which would help to build and manage the marketing strategy. Hence, with these aspects, this study will provide important insights to the marketing researchers as well as to the marketing professionals for their marketing practices.