Dynamic and marketing capabilities as determinants of firm performance: evidence from automotive industry

Abstract

Purpose This study aims to explore the roles and relations of dynamic capabilities (DCs) and marketing capabilities (MCs) to generate firm performance through new empirical data from the automotive industry in an emerging market, Turkey, where volatile market conditions may compel firms to use both their DCs and MCs. The automotive industry dynamic character, which is shaped by fierce competition among car manufacturers, fluctuating customer demands and strong effect of environmental forces, provides an ideal context for examining the performance outcomes of MC and DC in non-static environments. This study aims to show whether better financial performance can be achieved through an integrated MC and DC framework; if the level of environmental dynamism (ED) influences the utilization of MCs; and the impact of MC and DC convergence on firm performance by using emerging market data, which is rare in the extant literature. Design/methodology/approach This paper empirically investigates the role of MCs on the relationship between DCs and firm performance and the effect of ED in marketing capability development through a study of 162 top level managers from the automotive industry in Turkey using multiple regression methods. A self-administered questionnaire was used to collect data. A maximum concern was given to obtain at least three questionnaires from each firm to minimize the risk of getting biased answers from only one manager. Findings The data were analyzed by the regression method, and the mediation and moderation tests were conducted to test the established hypotheses. The direct relationship between MCs and firm performance was examined through linear regression, and a significant relationship was found (ß = 0.408; t = 5.656; p < 0.001). Pricing (ß = 0.404; p < 0.001), marketing research (ß = 0.367; p < 0.001) and marketing strategy and implementation (ß = 0.336; p < 0.001) had the strongest association with firm performance. The mediating role of MC on the relationship between DC and firm performance was assessed, and the analysis result yielded a significant result (ß = 0.439; t = 6.174; p < 0.001). Finally, the moderating effect of ED on the direct relationship between MC and firm performance was assessed. Yet, the interaction term was insignificant (ß = 0.013; t = 0.103; p = 0.918) in predicting firm performance. Research limitations/implications Although the data set covers a broad range of firms operating in the Turkish automotive industry, the generalization of findings should only be possible through obtaining fresh evidence from other emerging markets that possess the similar market characteristics of Turkey. The cross-sectional nature of the study may offer insights only for a certain period of time; thus, additional longitudinal studies are recommended to see the dynamic changes on the constructs and relationships between them. Future studies may also include qualitative methods, i.e. interviews with top managers to have a deeper understanding on how DC–MC interaction creates better performance. Practical implications This study empirically shows the importance of MCs for firm performance; thus, managers should allocate significant efforts and resources for improving MCs. The demand for the electric and even autonomous vehicles is likely to increase in the following years, and this new era in the automotive industry requires more R&D and innovation-based products, i.e. green vehicles with low carbon footprint, the use of robotics and long-life batteries for electric vehicles. The cost-related pricing may no longer be a competitive advantage for the firms in emerging markets such as Turkish automotive industry; thus, more investment for disruptive technologies should be considered. Originality/value The results show that MCs of firms mediated the relationship between DCs and economic performance. Yet, ED did not play a moderating role on the relationships between MCs and performance. It is concluded that DCs were associated with improved firm performance via MCs. Furthermore, the insignificant impact of ED on the development of MCs leading to better performance was explained by firms’ given over-performing efforts in the context of emerging markets.

Marketing capabilities revisited: a resource-based study in the automotive industry

“…Our findings indicate that marketing capabilities have a significant direct impact on firm performance. These findings corroborate other studies (i.e., Cataltepe et al, 2022;Wilden & Gudergan, 2015) and once more highlight the importance of MCs of firms in sustaining competitive advantage. Pricing was the most influential MC on firm performance and marketing research, along with marketing strategy and implementation followed the pricing capability.…”

“…While product development refers to developing new products and services that offer new value to the customers, pricing is the capability of a price policy that leads the firm to gain maximum profit from the market (Morgan et al, 2018). Effective channel management decisions can create unique shopping experiences for customers, and marketing research helps firms collect adequate data about customer needs (Cataltepe et al, 2022). Marketing communication enables firms to maintain and maximize their personalized relations with customers, and marketing strategy and implementation-related decisions support firms in "selecting the most productive available resource combinations to match market conditions" (Kamasak, 2013, p. 243).…”

Corporate Political Activities and Corporate Reputation Relationship: The Moderating Role of Corporate Social Responsibility

“…The mean number of years in business was 29.36, and the standard deviation was 23.31. Research (e.g., Cataltepe et al, 2022) revealed that firms which have been in business for longer periods of time and have been larger in size emitted a more favourable image to society. Additionally, Porter (1991, p. 98) argues that "industry occupies an inherently central role, either direct and/or indirect in determining the sustainability of strategic positioning and hence of performance.…”

“…Yet, an emerging stream of research theorises that CPA and CSR can be combined, and the interactive effects of CPA and CSR can result in more positive organisational outcomes since CPA and CSR complement each other. CPA and CSR are both relational constructs, and they include many "relational activities such as media campaigns, lobbying, philanthropy, and interactions with NGOs, government and bureaucrats" (De Roeck et al, 2016;Hillman et al, 2004) which can influence stakeholder evaluations of firms' actions and create favourable or unfavourable perceptions of image and prestige that endow firms with competitive advantages (Cataltepe et al, 2022;den Hond et al, 2014;Kamasak, 2017;Kamasak et al, 2019b;Morsing & Roepstorff, 2015;Rindova et al, 2010).…”

Improving firm performance in a competitive industry

“…Given this void, Cataltepe et al (2022) consider the issues in a study of companies operating within Turkey’s automotive industry, the fourth-largest in Europe. It is the nation’s biggest export industry and is closely associated with other sectors like petroleum, chemicals and metals.…”