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Shahriar Azizi
is an assistant professor of Marketing in the Department of Management and Accounting at Shahid Beheshti University, Tehran,
Iran. He has published more than 20 articles and three books on marketing topics in Iranian journals, and also serves as reviewer
of three Persian-language journals.
ABSTRACT In this article, the relationship between marketing strategy and the
marketing capability of three categories of business performance – overall, financial
and non-financial – has been investigated using a questionnaire including 30
parameters. The acceptable Cronbach’s in the questionnaire is considered to be
0.80. The multiple regression tests indicate that marketing strategy has no effect
on the overall performance (b = 0.001; t = 0.005), whereas it shows a positive effect
on non-financial performance (b = 0.412; t = 3.067), and a negative effect on financial
performance (b = − 0.293; t = − 2.081). The results also indicate that marketing capability
has positive effects on all three investigated categories, that is, the overall
performance (b = 0.727; t = 5.680), the non-financial performance (b = 0.481; t = 3.580)
and the financial performance (b = 0.649; t = 4.612).
Journal of Medical Marketing (2009) 9, 309–317. doi:10.1057/jmm.2009.33
Correspondence:
Shahriar Azizi INTRODUCTION pre-requisites for running a proper health
Department of Business
Administration, IRAN-
Health care is among the essential system is to ensure the smooth supply of
Tehran-Evin-SBU University-
Faculty of Management and
concerns and challenges of societies necessary medical equipment for the
Accounting, Shahid Beheshti
University of Tehran,
worldwide, and it has a direct effect community. Companies involved in the
PO Box 1983963113, on the economic efficiency of the medical equipment sector are highly
Tehran 1967933759, Iran
E-mail: s-azizi@sbu.ac.ir community. One of the major affected by the ever-changing
2001 397.79 —
The large number of medical equipment
2002 423.56 0.065 companies present in this market indicates
2003 465.39 0.0985 that this is a fragmented industry. The
2004 363.14 − 0.22
2005 336.21 − 0.074 overall operation medical equipment
2006 425.98 0.267 market and smooth availability of the
2007 534.31 0.25
products for the patients is not satisfactory,
310 © 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317
Effect of MKS and MC on business performance
and the performance of this sector needs performance through sales, physical
to be improved. A number of factors distribution, after-sale services and
affect the performance of companies, development of new market opportunities.
including medical equipment companies, With respect to the role of marketing
the parameters of which we can call strategy in the organization, four items
‘marketing capability’ and ‘marketing can be highlighted:
strategy’ of the involved company. By
‘marketing capability’ we mean a 1. Marketing strategy plays an essential role
company’s various marketing-related in higher performance.
abilities and capacities: the higher the 2. Rapid technological advances have
capability, the higher performance of the made the business environment of this
subject company is assumed to be. sector more complicated and difficult to
Marketing strategy – which reflects a predict.
company’s relationship and interaction 3. The main activities of the organization
with its business environment – can also are determined based on business
affect corporate performance. In this strategy, product life cycle and other
study, we have attempted to examine situational factors of the company/
and analyze the effects of these two product.
aforementioned factors on the (1) overall, 4. Business strategy and marketing strategy
(2) financial and (3) non-financial should be aligned, so that they present a
performance of Iran’s medical equipment common objective for the company.
companies.
To ensure an effective marketing strategy
BACKGROUND and performance of the organization, the
concept of ‘market orientation’ needs to
Marketing strategy and be highlighted. The four main aspects of
performance relationship market orientation include (1) continuous
A number of factors, including the market research and data collection from
increased competition among local and the environment, appropriate response to
international companies, the emergence customer requests, improved customer
of more demanding customers and great satisfaction and appropriate counter-
technological advances in medical activities against completion operation.
equipment, have led to a complex market Studies in hospitals in five US states
in this sector. In this complex market showed that higher market orientation
environment, the marketing strategy of leads to higher organizational performance,
the company could be a competitive as it clearly illustrates a company’s strategy
advantage versus other companies and increases the organizational
provided that they deliver services and commitment and customer satisfaction.2
values that not only meet the customer The studies on the effect of market
demands, but surpass them. Therefore, it orientation on the performance of
goes without saying that companies need pharmaceutical companies have also
to investigate and apply a differentiated shown that there is a positive relationship
strategy versus others to stand out in the among market orientation, innovation and
crowd. Six main corporate operations are performance.3 Different industries enjoy
usually categorized as follows: Marketing, different opportunities, successful strategies
R&D, Technology, Operations, HR and differ across industries, and strategic
Finance. The objective of marketing choices depend on situations.4 Another
activities is to increase organizational study revealed that in food and packaging
© 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317 311
Azizi et al
industries, marketing strategy had a more extend their existing product portfolio
significant effect on performance than with some modifications. Similar to
production strategy, while this did not market development, this strategy is more
apply to plastics and polymer industries.5 risky than market penetration.
‘Snow and Herbiniak’ found that there is
a strong positive relationship between Diversifica\tion: Companies initiate new
business-level strategies and performance.6 activities and operations that are irrelevant
Sharma indicates that marketing strategy to their existing markets and products.
plays an essential role in strengthening This is the most risky strategy because it
corporate performance, and it has third involves both new markets and new
ranking after production and R&D.7 products. It is useful when high profit is
guaranteed by taking higher risk.
ANSOFF’S MATRIX Nevertheless, some believe that
To illustrate the growth strategies, Ansoff diversification reduces the risk through
has developed a matrix focusing on a creating a diversified and more extensive
company’s product(s) and its existing and portfolio of products.
potential markets.8
Relationship between marketing
Existing New
product(s) product(s)
capability and performance
Marketing capability is an integrated
Existing Market Product process designed to make use of corporate
market(s) penetration development
New market(s) Market Diversification knowledge, skills and resources. It enables
development businesses to better meet their customers’
needs through added value services to
Considering the existing and new
their products. A company’s marketing
product(s) as well as the existing and new
capability refers to its ability to
market(s), four general strategies can be
differentiate its product(s) and service(s)
investigated:
from those of its rivals, as well as creating
Market Penetration: Companies can achieve and maintaining a strong profitable brand.9
their development goals through increasing Many marketing scholars believe that
the market share of their existing products. marketing capability should be considered
This is the least risky strategy. In growing a part of successful marketing.10 The
markets, maintaining the market share, in capability-based theories indicate that
itself, is considered growth. In this case, companies are a combination of resources
companies tend to reduce prices while they and capabilities,11,12 and that they should
increase sales, advertisement, distribution continuously invest in a unique manner to
channels and so on. maintain and expand their marketing
capabilities.13 A company with high
Market Development: Companies seek new marketing capability – a pioneer in
markets for their existing products. If the identifying customers’ needs and
company possesses a unique product(s), it recognizing the factors affecting their
will try to approach a niche market purchasing behaviors – is able to put its
matching the product. This is more risky product(s) in the best position compared
than market penetration because it involves to those of its rivals. A differentiation at
entry into new unexplored markets. this level will provide the companies with
higher profit.14 In a survey on the effects
Product Development: Companies develop of the marketing process on corporate
new products for their existing markets or performance, Morgan found that the
312 © 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317
Effect of MKS and MC on business performance
© 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317 313
Azizi et al
314 © 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317
Effect of MKS and MC on business performance
*P < 0.01.
Abbreviations: FP – Financial performance; MC – Marketing capability; MKS – Marketing strategy; NFP – Non-financial performance;
PE – Overall performance.
© 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317 315
Azizi et al
316 © 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317
Effect of MKS and MC on business performance
© 2009 Palgrave Macmillan 1745-7904 Journal of Medical Marketing Vol. 9, 4, 309–317 317
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