Impact Of Chief Marketing Officer's Capabilities On Business Performance

Marketing is undergoing a radical change, this transformation allow marketing has the opportunity to create value in unprecedented ways for the enterprise. The marketing department was ever running independently in the Organizations, but now has been given an increasingly significant responsibility, affecting the whole enterprise (Chai Wenjing, 2008). As the key leader of the establishment and implementation of the enterprise marketing strategies, Chief Marketing Officer (who are called marketing majordomo in many Chinese companies, namely CMO), take the more prominent role. A review of the top management teams of the top 100 Fortune 500 firms revealed that across firms that do have CMO(sPravin Nath, 2006. However, recently some scholars made the research about if the exit of CMO in the top management teams would affect the business performance; they found that the exit of CMO in the top management teams didn't have a direct impact on business performance, yet the exit of CMO in the top management teams can't have a negative impact on business performance. Under the drive of the significant changes of consumer behavior and the diversification of media and channel, as a voice of the customer, the CMOs take the prior strategy responsibilities across the enterprise. So now a question which many CEOs and marketing scholars have to face is that what is the impact of the chief marketing officer's capacity on business performance on earth?Based on the literature review, this study expounds the role of CMO in the enterprise under the developing of economy and the changing of marketing. And based on the previous study and the strategic role CMO should take, the abilities of the CMO should have, including marketing capabilities, interpersonal skills and cognitive abilities. We make a model about the ability of CMO and business performance and propose four hypotheses about the relationships of four variables. That is: the higher the CMO's interpersonal skills, the higher the business performance. The higher the CMO's cognitive abilities of CMO, the higher the business performance. The higher the CMO's ability of CMO, the higher the business performance. In order to validate the four hypotheses, our study takes the companies in Changchun as the research objective, we get 106 samples through convenience samples. The test of reliability and validity for all scales that we used, show that all scales have certain reliability and validity, they could the valid measures for the four variables. The descriptive analysis showed that the sample has a good representation for the population, and the distribution of the sample is similar to normal distribution, it is suitable for the regression analysis. The SPSS for Windows15.0 software was used for analysis.The main conclusions of this study include:First, the higher the marketing capabilities of the CMO, the higher the business performance. This study proves that the marketing capabilities of the CMO have a strong positive effect on the finance performance and marketing performance of the company. Also the standardized coefficient is 0.663, namely the higher the marketing capabilities of the CMO, the higher the business performance. This result is consistent with the conclusion of Vorhies and Morgan in 2005.The marketing capabilities of the CMO is very important to gain a better business performance and so this ability should be an important criterion when they choose a CMO.Second, the higher the interpersonal skills of the CMO, the higher the business performance. This study proves that the interpersonal skills of the CMO has a strong positive effect on the finance performance and marketing performance of the company. Also the standardized coefficient is 0.566, namely the higher the interpersonal skills of the CMO, the higher the business performance. This result is consistent with the conclusions of Pravin Nath in 2006, Mintzberg in 1973, Lawrence A. Crosby and Sheree L. Johnson in 2005 and Gilliatt. Neal and Pamela Cuming in 1986. Not only the marketing capabilities of the CMO play an important role in gain a better business performance, but also the interpersonal skills of the CMO which includes communication skills and organization coordination ability play a role too.Third, the higher the cognitive abilities of the CMO, the higher the business performance. This study proves that the cognitive abilities of the CMO has a strong positive effect on the finance performance and marketing performance in the company. the standardized coefficient is 0.542, namely the higher the cognitive abilities of CMO, the higher the business performance. This result is consistent with the conclusions of Gilliatt. Neal and Pamela Cuming in 1986.The CMO should have the great forecast ability to make and adjust the marketing plan termly based on the market situation. Search more information from microcosmic condition and macroscopical circumstance and so on, the CMO should take charge of new product development and put forward the suitable scheme to gain the sustained competition advantage for the company in the complex environment.Fourth, the higher the ability of the CMO, the higher the business performance. This study proves that the ability of CMO has a strong positive effect on the finance performance and marketing performance of the company. And the standardized coefficient is 0.653, namely, the higher the ability of CMO, the higher the business performance. This result is consistent with the theory of leader characteristics, which means the ability of the leader can have an impact on the performance of the company. The contribution of the CMO to the business performance depends on the degree of his marketing capabilities, interpersonal skills and cognitive abilities.Finally, this article proposed some suggestions for future research:First, research and develop the scales of the CMO characteristics. Based on the previous research, this study analyzed the variety capacity of the CMO, such as marketing capabilities, interpersonal skills and cognitive abilities. In fact many scholars consider that a successful CMO must own more idiosyncrasies. Though talked with fifty CMOs from top marketing organizations, they found that a excellent CMO must be: put the consumer at the heart of marketing, make marketing accountable, embrace the challenges of new media, recognize the new organizational imperative, live a new agency paradigm and remain adaptable (Gregor Harter, Edward Landry and Andrew Tipping, 2007). But those new construct must be studied further and given an operational definition. This will further enrich the marketing management theory. Second, research the impact of chief marketing officer's capabilities on business performance in more corporations all over the China. Because there are lots of differences in economic level, local culture, enterprise scale and the level of development in differences city in China, but our research can just represent the corporations in northern part of China. And in our study, some factors such as enterprise scale, enterprise property and the size of the target market were ignored. So it's valuable to research this issue in more corporations all over the China.Third, study the relationship of CMO's capacity, market orientation and business performance. This study had proved that CMO's ability has a strong positive effect on business performance. And there are many scholars found that marketing orientation has a direct positive impact on business performance, Narver and slater (1990) proved that marketing orientation has a direct positive impact on ROI (Return On Invest) based on study in one hundred and thirteen strategic business units of a enterprise in US. Jaworski and Kohli(1993) also studied in two hundred and twenty two strategic business units of one hundred and two companies in US, and proved that marketing orientation has a direct positive impact on performance. There were many scholars such as DeshPande(1993);Deng,Dart(1994);Pelham,Wilson(1996);Balakrishnan(1996);Gray et. al(1998);Wood et. al(2000);Laughli(2002) and Tseet.1(2003) studied in some big enterprises of US, Japan and Canada, they also proved that marketing orientation has a direct positive impact on business performance(Fred langerak,2003). Then what's kind of the Chief Marketing Officer's Capabilities impact on marketing orientation? And what's the relationship between Chief Marketing Officer's capabilities, marketing orientation and business performance? So it's valuable to research this issue further.Fourth, research in the evolving role of the CMO. With the developing of economy and the changing of market and the marketing definition, the responsibilities of marketing department are not just selling, advertising and market research (Piercy, 1985). Scholars Gilliatt Neal and Pamela Cuming(1986) suggested that the chief marketing officer should play an important role in imbuing the culture of an organization with a marketplace perspective by injecting strategic marketing into the planning process of the organization, analyzing of needs and desires of selected market segments, proceeding to formulate the organization's goals, analyzing of the organization's resources, competitive analysis, portfolio analysis, political risk analysis, cash use and generation analysis, and cost reduction studies. Besides, chief marketing officer also take part in decision-making about products/services, customers and markets, pricing, technology, competition, environment, financial resources, physical resources and human resources. With the development of society and corporate, the responsibilities of chief marketing officer is increasing, so the role that Chief Marketing Officer play in the enterprise should be further studied.