Description
The purpose of this study is to develop and test a model of antecedents and consequences for marketing
audits (MAs). The research used a mail survey and a partial least square (PLS) method to test the hypotheses.
Drawing on a sample of Taiwanese firms, the results show that (a) a greater environmental
munificence indicates that less MAs are implemented, (b) a proactive business strategy contributes
significantly to the implementation of MAs, (c) MAs can contribute significantly to marketing performance,
and (d) MAs mediate the relationship between environmental factors and marketing
performance.
Antecedents and consequences of marketing audits: Empirical evidence from
Taiwanese ?rms
Wen-Kuei Wu
a, *
, Hui-Chiao Chen
b
, Yi-Xiu Huang
a
a
Department of Business Administration, Chaoyang University of Technology, Taiwan, ROC
b
Department of Accounting, National Yunlin University of Science & Technology, Taiwan, ROC
a r t i c l e i n f o
Article history:
Received 14 December 2012
Accepted 13 September 2014
Available online 29 May 2015
Keywords:
Marketing audits
Market environment
Marketing performance
a b s t r a c t
The purpose of this study is to develop and test a model of antecedents and consequences for marketing
audits (MAs). The research used a mail survey and a partial least square (PLS) method to test the hy-
potheses. Drawing on a sample of Taiwanese ?rms, the results show that (a) a greater environmental
muni?cence indicates that less MAs are implemented, (b) a proactive business strategy contributes
signi?cantly to the implementation of MAs, (c) MAs can contribute signi?cantly to marketing perfor-
mance, and (d) MAs mediate the relationship between environmental factors and marketing
performance.
© 2015 College of Management, National Cheng Kung University. Production and hosting by Elsevier
Taiwan LLC. All rights reserved.
1. Introduction
Increasing pressure to reduce costs has recently forced mar-
keting executives to reconsider the goals, structure, and effective-
ness of their marketing arms. However, because of a lack of
accountability, a loss of visibility, and dissatisfaction with market-
ing measurement systems the main problem identi?ed by mar-
keters is often the imperfect understanding of causal mechanisms
(Sidhu & Robert, 2008). As the accounting audit is a tool for eval-
uating a company's accounting practice, the marketing audit (MA)
can evaluate the appropriateness of marketing practices, ensuring
that they comply with established marketing strategies and plans,
and that they are effective.
As an optimum method for analyzing, evaluating, and
enhancing marketing practices (Kotler, 1999), the MA has not yet
reached a high level of methodological sophistication (Pimenta
da Gama, 2011). Furthermore, because of the lack of clarity
with which they are applied, the MA is considered by different
marketing managers as merely a profusion of checklists and a
distraction from the creative process that is at the heart of
marketing practices (Mylonakis, 2003). We believe that the
bene?ts of implementing the MA rely on the marketing man-
agers' perceptions of its ability to in?uence business perfor-
mance (Clark, Abela, & Ambler, 2006). Therefore, whether and
how MAs contribute strategic value to an organization should be
analyzed.
It seems dif?cult to design a comprehensive checklist to serve as
a universal MA model and to apply to each particular situation
(Pimenta da Gama, 2011). Whether the MA implementation in-
volves all possible dimensions of an audit depends on cost, the
target markets, and the market environment (Mylonakis, 2003).
However, few research studies go beyond the boundaries of a
company to discuss the impact of industrial factors, especially the
internal/external environmental factors on MAs. In addition,
although the MA has been used since its inception in the marketing
management process, scarce evidence exists for empirical valida-
tion of its effectiveness on marketing performance.
This study investigates the in?uence of internal/external factors
(e.g., environmental muni?cence, environmental dynamism, and
business strategies) on the MA, and examines to what extent the
MA have the greatest effect on marketing performance. This study
contributes to the MA literature by (a) elucidating MAs abilities to
enhance marketing performance, (b) examining the in?uence of
internal/external factors on the MA practice, and (c) showing the
MA's contributions to businesses and providing a guideline for
exploiting the full potential of MAs to improve the marketing
performance.
* Corresponding author. Department of Business Administration, Chaoyang
University of Technology, 168, Jifeng E. Rd., Wufeng District, Taichung, 41349,
Taiwan, ROC.
E-mail address: [email protected] (W.-K. Wu).
Peer review under responsibility of College of Management, National Cheng
Kung University.
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Asia Paci?c Management Review 20 (2015) 156e164
2. Theoretical background
2.1. The concept and strategic value of the MA
The concept of the MA can be traced to the late 1950s. According
to an American Management Association report titled “Analyzing
and Improving Marketing Performance: Marketing Audits in The-
ory and Practice”, the MA was de?ned for the ?rst time as a sys-
tematic, critical, and impartial review of the total marketing
operation; of the basic objectives and policies of the operation and
assumptions that underlie them; and the methods, procedures,
personnel, and organization employed to implement the policies
and achieve the objective (Shuchman, Sessions, Oxenfeldt, & Crisp,
1959). They de?ned the marketing audits' domain including
concept, objectives, issues, types and contents.
Kotler, Gregor, and Rodgers (1977) re?ned the MA as a
comprehensive, systematic, independent, and periodic examina-
tion of an organization's marketing objectives, strategies, objec-
tives, activities, and environment, designed to reveal problems and
opportunities, and to propose suggestions that would improve the
organization's marketing performance. Whereas these scholars'
de?nitions focus on the marketing operation, Mokwa (1986) indi-
cated that the MA has an organization-wide scope and acknowl-
edged the multiple roles the MA can play, such as a policy
innovation used to implement and evaluate marketing methods
and performance, an action framework, an instrument for inter-
vention or change. To sum up, most scholars are unanimous that
MA is a comprehensive review and appraisal of the assumptions
underlying objectives/policies/strategies, a prognostic and diag-
nostic instrument designed to identify any opportunities and
weaknesses, and a preventive and curative medicine which con-
tributes to marketing planning and strategy-making (Berry, Conant,
& Parasuraman, 1991).
2.2. The implementation of the MA
Numerous insights on how MA should be implemented are
provided. Kotler et al. (1977) identi?ed six components of the MA
including: (1)the marketing environment audit, (2)the marketing
strategy audits, (3)the marketing organization audit, (4)the mar-
keting systemaudit, (5)the productivity audit and (6)the marketing
function audit. Based on the unique characteristics of services,
Berry et al. (1991) proposed a checklist namely ISME (Index of
Service Marketing Excellence Instrument) composed of 76 items
and six dimensions. Brownlie (1993) also designed an instrument
composed of 52 questions to evaluate marketing effectiveness.
Moreover, Wilson (2002) provided a self-assessment checklist
composed of 1500 open-ended questions included in 28 evaluative
dimensions.
The major contributions of above literature were that they
de?ne the components or checklists of MAs to guide its imple-
mentation. Through using a diagnosis questions checklist, the MA
not only provides information on the organization's marketing
‘health’ (Pimenta da Gama, 2011), but also provides a practical step-
by-step guidance for the planning, implementation, and evaluation
of MAs (Brownlie, 1996; Mylonakis, 2003; Wilson, 1992). However,
the checklist approach has suffered from signi?cant defects
(Morgan, Clark, & Gooner, 2002). The MA may be implemented
with the objective of detecting problems but not necessarily
providing insights into solutions. Due to the primarily qualitative
checklists, there are little empirical validation of its usefulness in
marketing performance or knowledge concerning measurement
properties. Finally, the checklist approach was developed as uni-
versal, normative tools, without considering internal/external
environmental factors or ?rm-contingent in?uent factors.
Overall, although the MA literature elaborates the concepts and
strategic value of MA implementation, and provides many practical
step-by-step guidances, MA's abilities to enhance marketing per-
formance and examining the in?uence of environments on the MA
practice deserve more attention.
3. Research
3.1. Hypotheses and rationale
3.1.1. The in?uence of external and internal environmental factors
on MA
Drawing on literature of MA, whether internal/external envi-
ronmental factors affect the MA practice is still unknown. Re-
searchers have de?ned external environmental factors as
multidimensional concepts. For brevity, we focus only on envi-
ronmental muni?cence and dynamism (Egeren & O'Connor, 1998).
Environmental muni?cence refers to the potential for exploitable
opportunities and expansion within an industry (i.e., competitive
intensity), and environmental dynamism is characterized by rapid
technological advancements and rapidly changing consumer pref-
erences (i.e., market and technological turbulence).
When marketing managers perceive greater environmental
muni?cence, they are likely faced with a plethora of growth op-
portunities (Dickinson & Ramaseshan, 2004). In contrast, in envi-
ronments of low muni?cence, marketing managers are likely faced
with highly intense competition (Dess & Beard, 1984); therefore,
the desire to be competitive and market-oriented may provide
companies with the impetus to obtain adequate environmental
information, explore market opportunities, and exploit marketing
resources properly (Kyriakopoulos & Moorman, 2004). An effective
implementation of MAs should, therefore, ensure that all marketing
activities correspond properly with business strategies and mar-
keting plans. Based on this discussion, we propose the following
hypothesis:
H1. Environmental muni?cence is negatively related to the
implementation of MAs.
If marketing managers perceive greater environmental dyna-
mism, they may have smaller decision windows and diminishing
opportunity streams. Consequently, they must develop a sense-
making capability to allow an organization to acquire, interpret,
and act on information regarding its environment (Joseph &
Kalwani, 1995; Morgan, Vorhies, & Mason, 2009; Neill, McKee, &
Rose, 2007; Weick, Sutcliffe, & Obstfeld, 2005). Therefore, the
monitoring process of MAs for the systematic and periodic review
of reactions to market changes may prevent rigidity within an or-
ganization's sense-making framework.
In addition, environmental dynamismmay also facilitate market
orientation resulting from its boundary function, which is respon-
sible for effecting and managing environmental changes (Gotteland
& Boul e, 2006; Miles, Covin, & Heely, 2000; Song & Parry, 2009).
When environmental dynamism is high, a high level of market
orientation is required to encourage companies to predict and
respond to changes in customer preferences (Li, Lin, & Chu, 2008;
Rapp, Schillewaert, & Wei Hao, 2008). Market orientation sig-
ni?es a superior market-learning capability in gathering and using
information to adapt in turbulent environments (Ottesen &
Grønhaug, 2004). Therefore, perceived environmental dynamism
may trigger efforts in MAs to maintain a high level of market
orientation and evaluation of market information because the MA
is known as a tool for the comprehensive, systematic, independent,
and periodic examination of market conditions (Taghian & Shaw,
2008). Based on this discussion, we present the following
hypothesis:
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 157
H2. Environmental dynamism is positively related to the imple-
mentation of MAs.
From a strategic perspective, the classi?cation of business units
and organizations according to business strategies provides human
resources, organizational structures, and information requirements
with appropriate guidelines (Hagen & Amin, 1995). Previous
research has also suggested that business strategy is a source for
marketing information and control-system differences among or-
ganizations (Valos &Bednall, 2010). Given the strategic value of the
MA in planning, strategy-making, and marketing (Brownlie, 1996;
Morgan et al., 2002), it follows that business strategy is corre-
lated with not only the level of market scanning activity and market
intelligence generation but also the manner in which MA is
implemented.
Miles and Snow (1978) outlined four business strategies: the
prospector strategy, analyzer strategy, defender strategy, and the
reactor strategy. To exploit new market opportunities, prospectors
exhibit a higher level of advanced environmental scanning activ-
ities than defenders (Subramanian, Fernandes, & Harper, 1993). To
continuously identify market opportunities and threats, prospec-
tors must obtain and use market data (Frambach, Prabhu, &
Verhallen, 2003). The necessity for maintaining adequate market-
intelligence generation may prompt prospectors to conduct MAs.
In contrast, defenders attempt to seal off their existing markets and
customers, and they often have a greater internal focus on the
ef?cient retention of market territories (Valos & Bednall, 2010).
Moreover, those applying a reactor strategy do not respond
consistently to entrepreneurial problems (Slater & Olson, 2001).
Consequently, they may have little need for MAs as a method for
obtaining comprehensive market information. We therefore pro-
pose the following hypothesis:
H3. Business strategies modeled on the prospector strategy are
positively related to the implementation of MAs.
3.1.2. The MA and marketing performance
The reviewof the literature of MA's strategic value suggests that
companies with a well-implemented MA system have a greater
capacity to (a) achieve their stated direct and indirect performance
objectives (Morgan et al., 2002; Brownlie, 1996), (b) derive useful
?ndings, recommendations, and suf?cient knowledge regarding
markets and customers (Mylonakis, 2003), (c) gain strategy-
execution effectiveness, user satisfaction, and organizational
learning (Morgan et al., 2002), and (d) effect changes in market
share and overall ?nancial performance (Taghian & Shaw, 2008).
Furthermore, MAs also facilitate a higher degree of conscientious-
ness and caution toward the business environment, and a more
objective, non-intuitive approach to decision making as a means to
achieve organizational objectives (Sauter, 1999). Hence, the use of
MAs can be highly related to marketing performance (e.g., sales,
market shares, pro?tability, and customer satisfaction). Based on
these rationales, we set forth the following hypothesis:
H4. The implementation of MAs is positively related to marketing
performance.
Fig. 1 summarizes the research hypotheses.
3.2. Measures
We developed a multi-item scale and a 5-point scale
(1 ¼ strongly disagree, 5 ¼ strongly agree) to measure perceived
environmental muni?cence and environmental dynamism,
respectively (Slater & Narver, 1994; Egeren & O'Connor, 1998; Song
& Parry, 2009; Kumar, Jones, Venkatesan, & Leone, 2011). For
business strategies, an ordinal scale based on one proposed by
Miles and Snow (1978) was used. The respondents were asked to
choose one of four descriptions that best characterized their busi-
ness strategy (in increasing order of proactiveness and aggres-
siveness, 1 ¼ Reactor, 2 ¼ Defender, 3 ¼ Analyzer, and
4 ¼ Prospector). However, the descriptions were labeled Type 1,
Type 2, Type 3, and Type 4, without specifying the name of the
business strategy (Rajaratnam & Chonko, 1995). This self-typing
paragraph approach is commonly used in strategic management
research (Slater, Olson, & Finnegan, 2011).
We conceptualized MA implementation as the extent to which
the MA has been implemented. To assess the extent of MA imple-
mentation, we asked respondents to indicate on a 5-point scale
(1 ¼ not ever implemented, 5 ¼ implemented frequently) how often
their organization implements activities of MAs. In the question-
naire, we also de?ned the scope of MA activities and stated that the
MA should be implemented by a person or group which is internal
to the business unit but external from the marketing operation, or
implemented by a management consulting ?rm or practitioner
(Kotler et al., 1977).
Because performance is a multidimensional construct (Slater &
Olson, 2001), we adopted a broad set of indicators, including
?nancial and non-?nancial measures of business performance.
Furthermore, because objective performance measures have been
impossible to obtain at the business level, and subjective measures
have been commonly used in research and shown to correlate with
objective measures of performance (Slater &Narver, 1994), we used
a perceptual, multiple-item, 5-point semantic performance mea-
sure (1 ¼ highly dissatis?ed, 5 ¼ highly satis?ed). The ?nancial
performance measures (market share, sales, and pro?tability) were
drawn from research by Slater and Narver (1992) and Morgan et al.
(2009). The non-?nancial performance measures (customer satis-
faction, competitive advantage, and innovation) were adopted from
research by Morgan et al. (2002), Ambler, Kokkinaki, and Puntoni
(2004) and Pimenta da Gama (2011).
We also used control variables that may affect an organization's
MAs and marketing performance, such as the number of employees
and annual net sales. We selected these variables because of their
potential impact on MAs (Brownlie, 1996) and marketing perfor-
mance (Morgan et al., 2009; Song & Parry, 2009).
To ensure the measures' content validity, we conducted a series
of pretests and interviews to ?nalize the conceptual model and
measures. First, ?ve academic experts with extensive experience in
and knowledge of internal audits and MAs were asked to evaluate
the adequacy of the items. Second, the revised questionnaire was
pretested using a sample of 30 senior marketing executives. They
were asked to complete the questionnaire and provide comments
related to the questionnaire.
3.3. Data collection
A random sample of 800 companies was drawn from
CommonWealth Magazine's list of Taiwan's Top 1000 Manufac-
turers and 500 Service Enterprises in 2009. A package with a copy
of the questionnaire, a cover letter, and a postage-paid return en-
velope was then mailed to senior marketing managers or company
directors. We asked each respondent to refer to either the largest
strategic business unit (SBU) in their organization or the unit with
which they were most familiar. Following the mailing of ques-
tionnaires, we made follow-up phone calls to encourage responses
and to ensure that the informants had a high degree of strategic
decision-making involvement and marketing responsibility in their
organization (Day & Nedungadi, 1994; Menon, Bharadwaj, Adidam,
& Edison, 1999).
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 158
A total of 120 fully completed, usable responses were received
for an effective response rate of 15%. To ensure that non-response
biases were not present, early and late respondents were
compared on all variables of interest by using traditional t-tests
(Armstrong & Overton, 1977). The results of the t-tests indicated
that non-response bias did not appear to be a signi?cant problem.
Based on the recommendations of Podsakoff, Mackenzie, Lee, and
Podsakoff (2003), we also used various procedural and statistical
remedies against the problems of common method variance and
single respondent bias (Guenzi, Georges, & Pardo, 2009), including
(a) guaranteeing respondent anonymity, (b) using established
scales and questionnaire pretests, (c) using varying scale formats
and anchors (e.g., strongly disagreedstrongly agree, never-
dfrequently, highly dissatis?eddhighly satis?ed, etc.); and (d)
Harman's (1967) one-factor test. Our results show that no one-
factor accounts existed for more than 50% of variance in the vari-
ables and that common method variance was present (Podsakoff
et al., 2003). Table 1 presents descriptive statistics of the research
sample.
The research model was evaluated using the PLS (partial least
squares) method instead of covariance-based SEM techniques
because PLS can handle both re?ective and formative constructs
simultaneously (Chin, 1998). Furthermore, PLS does not require
large sample sizes, and it accepts non-normally distributed and
non-intervally scaled (ordinal) data (Ashill, Rod, & Carruthers,
2008). In PLS estimation, indicators must be speci?ed as either
formative or re?ective of latent constructs. Following the method of
Raymond, Julien, and Ramangalaby (2001), we treated the in-
dicators as formative for a company's business strategies, number
of employees, and annual net sales because these indicators
directly help create these constructs. We used re?ective indicators
for environmental muni?cence, environmental dynamism, MA
implementation, and marketing performace because the indicators
reveal the various features of these constructs (Chin, 1998). Before
testing the measurement model, we used principal component
factor analysis to identify the various items de?ning the re?ective
constructs. Our measure validation and measurement model
testing were conducted using SmartPLS 2.0 (Ringle, Wende, & Will,
2005).
The items de?ning the construct of macro environment audits,
marketing strategy audits, and marketing productivity audits were
excluded because their factor loadings were below 0.5 (Hair,
Annderson, Tatham, & Black, 1998). We then grouped the rest of
the items into three constructs: business environment audits
(BEAs), marketing information system audits (MISAs), and MFAs.
We tested the reliability and validity of the measurement model
using PLS. As shown in Table 2, all composite reliability coef?cients
attained the acceptable 0.7 level. The average variance extracted
(AVE) for all constructs were greater than 0.5, supporting the
convergent validity of the measurement items (Fornell & Larcker,
1981).
To evaluate the presence of discriminant validity among con-
structs, the AVE square root should be superior to the correlation
among constructs (Fornell &Larcker, 1981). As presented in Table 3,
all constructs complied with this prerequisite.
4. Results
The structural model can be tested with a path coef?cient (b)
analysis and the explained variance (R
2
) of each endogen construct.
The stability of the estimators was validated by the Student t-test
from a bootstrapping of 200 random samples, and all coef?cients
for all paths in the model were signi?cant at the 0.05 level. The PLS
method simultaneously estimated the measurement and structural
components of the research model, as shown in Fig. 1. To investigate
how the implementation of MAs might be in?uenced by internal/
external factors and the effect of MAs on marketing performance,
alternative models and tests must be compared to examine if MAs
Fig. 1. Research framework.
Table 1
Descriptive statistics.
Industry Frequency Valid (%)
Electrical & Electronic 32 26.7
Engineering/iron/steel 16 13.3
Food 13 10.8
Chemical manufacturing 12 10.0
Information product 4 3.3
Other manufacturing 12 10.0
Medicine 7 5.8
Building/real estate 5 4.2
Financial/insurance 5 4.2
Other services 14 11.7
Employee numbers
1.64 is signi?cant at the p < .05 one-tailed.
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 161
marketing managers and directors, a lesser extent of MA imple-
mentation is conducted, and (b) a proactive business strategy
contributes strongly to the implementation of the MA. The extent
to which MAs are implemented depending on business
environments and strategies highlights the role of MAs in helping
organizations respond accurately to competitive environments,
and ensuring that proactive business strategies are being achieved.
However, the nonsigni?cant effects of environmental dynamismon
the implementation of MAs are inconsistent with our expectations,
which indicate that the question of whether environmental dyna-
mism affects the implementation of MAs merits further investiga-
tion. Few empirical studies have clari?ed the impact of business
environments and strategies on the implementation of MAs. Our
study, however, demonstrates that business environments, espe-
cially environmental muni?cence and different types of business
strategies, can impact the extent to which MAs are implemented.
In this research, we also extend the focus of the MA's impact on
organizational performance from the level of the complete MA to
the level of individual MA activities. Previous research con?rmed
that an effectively implemented MA can result in strategy-
execution effectiveness, customer satisfaction, and the satisfac-
tion of marketing performance objectives (Morgan et al., 2002;
Taghian & Shaw, 2008). This study enhances existing research by
proving that the implementation of individual MAs not only pro-
duces different effects on marketing performance, but also medi-
ates environmental factors (e.g., environmental muni?cence and
business strategies) and marketing performance. Each MA activity
indeed plays a strategic role in determining whether marketing
activities are being accurately and effectively implemented which,
in turn, enhances marketing performance.
6. Managerial implications
This study investigated the correlation between the imple-
mentation of MAs and perceptions of internal/external environ-
ments, and the extent to which MAs can enhance marketing
performance in the context of Taiwanese industries. Our ?ndings
provide scholars and managers with a basis that is considerably
more solid than intuition and anecdotes for recommending the
implementation of MAs. First, our research con?rms that internal/
external environmental factors can affect the choice of imple-
menting MAs. Our ?ndings show that companies confronted with
lowenvironmental muni?cence tend to dedicate more resources to
MAs. From a practitioner's standpoint, MAs should be conducted
periodically to ensure that marketing executives assess the key
Table 5
Explained variance (R
2
), communality, redundancy, and goodness-of-?t (GOF) index
for Models 1, 2 and 3.
Construct Model 1 Model 2 Model 3
Business environment audits
Explained variance (R
2
) 0.157 0.147
Communality 0.778 0.777
Redundancy 0.001 0.044
Marketing information system audits
Explained variance (R
2
) 0.175 0.163
Communality 0.780 0.782
Redundancy À0.008 0.084
Marketing function audits
Explained variance (R
2
) 0.178 0.153
Communality 0.758 0.759
Redundancy 0.005 0.077
Financial performance
Explained variance (R
2
) 0.404 0.282 0.467
Communality 0.941 0.941 0.941
Redundancy 0.152 À0.031 0.141
Non-?nancial performance
Explained variance (R
2
) 0.076 0.238 0.254
Communality 0.751 0.758 0.758
Redundancy 0.008 À0.045 À0.005
Environmental muni?cence
Explained variance (R
2
)
Communality 0.748 0.733 0.743
Redundancy
Environmental dynamism
Explained variance (R
2
)
Communality 0.692 0.693 0.693
Redundancy
Business strategy
Explained variance (R
2
)
Communality 1.000 1.000 1.000
Redundancy
Average
Explained variance (R
2
) 0.198 0.260 0.237
Communality 0.780 0.791 0.783
Redundancy 0.030 À0.038 0.043
Goodness-of-?t index 0.393 0.454 0.431
Fig. 2. Result of the PLS analysis.
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 162
trends and their implications for marketing actions and that mar-
keting plans and activities proceed in a manner that is consistent
with both consumer needs and the marketing goals of the orga-
nization (Brownlie, 1996; Sidhu & Robert, 2008; Wilson, 1992).
Second, our study shows that companies adopting proactive
strategies tend to reinforce the use of MAs. MAs bring value to a
company by obtaining comprehensive information on the busi-
ness environment and by providing a basis for implementing
proactive business strategies. MAs should therefore be favored by
business managers who want to adopt a proactive strategy and
enhance their company's marketing performance. The more pro-
active a company's business strategy, the more bene?cial and
effective MA become. MA should be supported by business
managers aimed at increasing marketing activities' effectiveness
and performance.
Third, our research con?rms that MAs, particularly the BEA,
MISA, and MFA, contribute signi?cantly to marketing performance.
These audits help marketing managers ensure that marketing
strategies and information systems and activities proceed as
planned, and that they match the needs of the market. Our ?ndings
suggest that the procedures of the BEA, MISA, and MFA should be
formalized by marketing managers because these procedures can
assist companies in implementing effective and ef?cient marketing
plans. We also observed that the greatest contribution of MA ac-
tivities to ?nancial performance lies in the MISA, followed by the
BEA and the MFA, which shows the importance of using the limited
resources of MAs properly on each MA activity. Within the MA, the
MISA prioritizes appropriate marketing information and effective
data-processing systems within an organization. Conversely, the
BEA, which bene?ts non?nancial performance, is an effective tool
for obtaining information on the market environment and
customer preferences. Hence, investments in business environ-
ment analysis and related audits can produce payoffs in marketing
performance.
Finally, our results show that MAs play a mediating role be-
tween environmental muni?cence and marketing performance
(i.e., ?nancial and non?nancial performance), and between busi-
ness strategies and ?nancial marketing performance. Therefore,
MAs are instrumental in enhancing the effectiveness of a market
orientation strategy and helping proactive strategic behavior,
thereby ensuring adequate, timely and effective use of market
information, which then leads to a more enhanced marketing
performance. Managers should consider the strategic value of
MAs and focus on methods to strengthen the implementation of
MAs.
7. Research limitations and ideas for future research
Although the surveys in this study were conducted with
knowledgeable marketing decision-makers, problems associated
with self-reported data based on mail surveys may still exist.
However, analyses of the multi-item scales provide supporting
evidence for the reliability and discriminant validity of the mea-
sures. Future research might include the identi?cation of other
variables, such as the MA implementation process, the various
levels of market development, and the signi?cance of the MA as
perceived by managers, which are also likely to mediate the re-
lationships between the MA and marketing performance. More-
over, future studies should consider the in?uence of marketing-
resource deployment methods and use variable measures of the
MA to investigate different types of businesses. Finally, using larger
national samples can facilitate in the testing and comparison of
potential differences in MAs on an international level, and struc-
tural equation methods can be used to verify the related ?ndings.
Con?ict of interest
All contributing authors declare no con?icts of interest.
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W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 164
doc_661875278.pdf
The purpose of this study is to develop and test a model of antecedents and consequences for marketing
audits (MAs). The research used a mail survey and a partial least square (PLS) method to test the hypotheses.
Drawing on a sample of Taiwanese firms, the results show that (a) a greater environmental
munificence indicates that less MAs are implemented, (b) a proactive business strategy contributes
significantly to the implementation of MAs, (c) MAs can contribute significantly to marketing performance,
and (d) MAs mediate the relationship between environmental factors and marketing
performance.
Antecedents and consequences of marketing audits: Empirical evidence from
Taiwanese ?rms
Wen-Kuei Wu
a, *
, Hui-Chiao Chen
b
, Yi-Xiu Huang
a
a
Department of Business Administration, Chaoyang University of Technology, Taiwan, ROC
b
Department of Accounting, National Yunlin University of Science & Technology, Taiwan, ROC
a r t i c l e i n f o
Article history:
Received 14 December 2012
Accepted 13 September 2014
Available online 29 May 2015
Keywords:
Marketing audits
Market environment
Marketing performance
a b s t r a c t
The purpose of this study is to develop and test a model of antecedents and consequences for marketing
audits (MAs). The research used a mail survey and a partial least square (PLS) method to test the hy-
potheses. Drawing on a sample of Taiwanese ?rms, the results show that (a) a greater environmental
muni?cence indicates that less MAs are implemented, (b) a proactive business strategy contributes
signi?cantly to the implementation of MAs, (c) MAs can contribute signi?cantly to marketing perfor-
mance, and (d) MAs mediate the relationship between environmental factors and marketing
performance.
© 2015 College of Management, National Cheng Kung University. Production and hosting by Elsevier
Taiwan LLC. All rights reserved.
1. Introduction
Increasing pressure to reduce costs has recently forced mar-
keting executives to reconsider the goals, structure, and effective-
ness of their marketing arms. However, because of a lack of
accountability, a loss of visibility, and dissatisfaction with market-
ing measurement systems the main problem identi?ed by mar-
keters is often the imperfect understanding of causal mechanisms
(Sidhu & Robert, 2008). As the accounting audit is a tool for eval-
uating a company's accounting practice, the marketing audit (MA)
can evaluate the appropriateness of marketing practices, ensuring
that they comply with established marketing strategies and plans,
and that they are effective.
As an optimum method for analyzing, evaluating, and
enhancing marketing practices (Kotler, 1999), the MA has not yet
reached a high level of methodological sophistication (Pimenta
da Gama, 2011). Furthermore, because of the lack of clarity
with which they are applied, the MA is considered by different
marketing managers as merely a profusion of checklists and a
distraction from the creative process that is at the heart of
marketing practices (Mylonakis, 2003). We believe that the
bene?ts of implementing the MA rely on the marketing man-
agers' perceptions of its ability to in?uence business perfor-
mance (Clark, Abela, & Ambler, 2006). Therefore, whether and
how MAs contribute strategic value to an organization should be
analyzed.
It seems dif?cult to design a comprehensive checklist to serve as
a universal MA model and to apply to each particular situation
(Pimenta da Gama, 2011). Whether the MA implementation in-
volves all possible dimensions of an audit depends on cost, the
target markets, and the market environment (Mylonakis, 2003).
However, few research studies go beyond the boundaries of a
company to discuss the impact of industrial factors, especially the
internal/external environmental factors on MAs. In addition,
although the MA has been used since its inception in the marketing
management process, scarce evidence exists for empirical valida-
tion of its effectiveness on marketing performance.
This study investigates the in?uence of internal/external factors
(e.g., environmental muni?cence, environmental dynamism, and
business strategies) on the MA, and examines to what extent the
MA have the greatest effect on marketing performance. This study
contributes to the MA literature by (a) elucidating MAs abilities to
enhance marketing performance, (b) examining the in?uence of
internal/external factors on the MA practice, and (c) showing the
MA's contributions to businesses and providing a guideline for
exploiting the full potential of MAs to improve the marketing
performance.
* Corresponding author. Department of Business Administration, Chaoyang
University of Technology, 168, Jifeng E. Rd., Wufeng District, Taichung, 41349,
Taiwan, ROC.
E-mail address: [email protected] (W.-K. Wu).
Peer review under responsibility of College of Management, National Cheng
Kung University.
HOSTED BY
Contents lists available at ScienceDirect
Asia Paci?c Management Review
j ournal homepage: www. el sevi er. com/ l ocat e/ apmrvhttp://dx.doi.org/10.1016/j.apmrv.2014.09.001
1029-3132/© 2015 College of Management, National Cheng Kung University. Production and hosting by Elsevier Taiwan LLC. All rights reserved.
Asia Paci?c Management Review 20 (2015) 156e164
2. Theoretical background
2.1. The concept and strategic value of the MA
The concept of the MA can be traced to the late 1950s. According
to an American Management Association report titled “Analyzing
and Improving Marketing Performance: Marketing Audits in The-
ory and Practice”, the MA was de?ned for the ?rst time as a sys-
tematic, critical, and impartial review of the total marketing
operation; of the basic objectives and policies of the operation and
assumptions that underlie them; and the methods, procedures,
personnel, and organization employed to implement the policies
and achieve the objective (Shuchman, Sessions, Oxenfeldt, & Crisp,
1959). They de?ned the marketing audits' domain including
concept, objectives, issues, types and contents.
Kotler, Gregor, and Rodgers (1977) re?ned the MA as a
comprehensive, systematic, independent, and periodic examina-
tion of an organization's marketing objectives, strategies, objec-
tives, activities, and environment, designed to reveal problems and
opportunities, and to propose suggestions that would improve the
organization's marketing performance. Whereas these scholars'
de?nitions focus on the marketing operation, Mokwa (1986) indi-
cated that the MA has an organization-wide scope and acknowl-
edged the multiple roles the MA can play, such as a policy
innovation used to implement and evaluate marketing methods
and performance, an action framework, an instrument for inter-
vention or change. To sum up, most scholars are unanimous that
MA is a comprehensive review and appraisal of the assumptions
underlying objectives/policies/strategies, a prognostic and diag-
nostic instrument designed to identify any opportunities and
weaknesses, and a preventive and curative medicine which con-
tributes to marketing planning and strategy-making (Berry, Conant,
& Parasuraman, 1991).
2.2. The implementation of the MA
Numerous insights on how MA should be implemented are
provided. Kotler et al. (1977) identi?ed six components of the MA
including: (1)the marketing environment audit, (2)the marketing
strategy audits, (3)the marketing organization audit, (4)the mar-
keting systemaudit, (5)the productivity audit and (6)the marketing
function audit. Based on the unique characteristics of services,
Berry et al. (1991) proposed a checklist namely ISME (Index of
Service Marketing Excellence Instrument) composed of 76 items
and six dimensions. Brownlie (1993) also designed an instrument
composed of 52 questions to evaluate marketing effectiveness.
Moreover, Wilson (2002) provided a self-assessment checklist
composed of 1500 open-ended questions included in 28 evaluative
dimensions.
The major contributions of above literature were that they
de?ne the components or checklists of MAs to guide its imple-
mentation. Through using a diagnosis questions checklist, the MA
not only provides information on the organization's marketing
‘health’ (Pimenta da Gama, 2011), but also provides a practical step-
by-step guidance for the planning, implementation, and evaluation
of MAs (Brownlie, 1996; Mylonakis, 2003; Wilson, 1992). However,
the checklist approach has suffered from signi?cant defects
(Morgan, Clark, & Gooner, 2002). The MA may be implemented
with the objective of detecting problems but not necessarily
providing insights into solutions. Due to the primarily qualitative
checklists, there are little empirical validation of its usefulness in
marketing performance or knowledge concerning measurement
properties. Finally, the checklist approach was developed as uni-
versal, normative tools, without considering internal/external
environmental factors or ?rm-contingent in?uent factors.
Overall, although the MA literature elaborates the concepts and
strategic value of MA implementation, and provides many practical
step-by-step guidances, MA's abilities to enhance marketing per-
formance and examining the in?uence of environments on the MA
practice deserve more attention.
3. Research
3.1. Hypotheses and rationale
3.1.1. The in?uence of external and internal environmental factors
on MA
Drawing on literature of MA, whether internal/external envi-
ronmental factors affect the MA practice is still unknown. Re-
searchers have de?ned external environmental factors as
multidimensional concepts. For brevity, we focus only on envi-
ronmental muni?cence and dynamism (Egeren & O'Connor, 1998).
Environmental muni?cence refers to the potential for exploitable
opportunities and expansion within an industry (i.e., competitive
intensity), and environmental dynamism is characterized by rapid
technological advancements and rapidly changing consumer pref-
erences (i.e., market and technological turbulence).
When marketing managers perceive greater environmental
muni?cence, they are likely faced with a plethora of growth op-
portunities (Dickinson & Ramaseshan, 2004). In contrast, in envi-
ronments of low muni?cence, marketing managers are likely faced
with highly intense competition (Dess & Beard, 1984); therefore,
the desire to be competitive and market-oriented may provide
companies with the impetus to obtain adequate environmental
information, explore market opportunities, and exploit marketing
resources properly (Kyriakopoulos & Moorman, 2004). An effective
implementation of MAs should, therefore, ensure that all marketing
activities correspond properly with business strategies and mar-
keting plans. Based on this discussion, we propose the following
hypothesis:
H1. Environmental muni?cence is negatively related to the
implementation of MAs.
If marketing managers perceive greater environmental dyna-
mism, they may have smaller decision windows and diminishing
opportunity streams. Consequently, they must develop a sense-
making capability to allow an organization to acquire, interpret,
and act on information regarding its environment (Joseph &
Kalwani, 1995; Morgan, Vorhies, & Mason, 2009; Neill, McKee, &
Rose, 2007; Weick, Sutcliffe, & Obstfeld, 2005). Therefore, the
monitoring process of MAs for the systematic and periodic review
of reactions to market changes may prevent rigidity within an or-
ganization's sense-making framework.
In addition, environmental dynamismmay also facilitate market
orientation resulting from its boundary function, which is respon-
sible for effecting and managing environmental changes (Gotteland
& Boul e, 2006; Miles, Covin, & Heely, 2000; Song & Parry, 2009).
When environmental dynamism is high, a high level of market
orientation is required to encourage companies to predict and
respond to changes in customer preferences (Li, Lin, & Chu, 2008;
Rapp, Schillewaert, & Wei Hao, 2008). Market orientation sig-
ni?es a superior market-learning capability in gathering and using
information to adapt in turbulent environments (Ottesen &
Grønhaug, 2004). Therefore, perceived environmental dynamism
may trigger efforts in MAs to maintain a high level of market
orientation and evaluation of market information because the MA
is known as a tool for the comprehensive, systematic, independent,
and periodic examination of market conditions (Taghian & Shaw,
2008). Based on this discussion, we present the following
hypothesis:
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 157
H2. Environmental dynamism is positively related to the imple-
mentation of MAs.
From a strategic perspective, the classi?cation of business units
and organizations according to business strategies provides human
resources, organizational structures, and information requirements
with appropriate guidelines (Hagen & Amin, 1995). Previous
research has also suggested that business strategy is a source for
marketing information and control-system differences among or-
ganizations (Valos &Bednall, 2010). Given the strategic value of the
MA in planning, strategy-making, and marketing (Brownlie, 1996;
Morgan et al., 2002), it follows that business strategy is corre-
lated with not only the level of market scanning activity and market
intelligence generation but also the manner in which MA is
implemented.
Miles and Snow (1978) outlined four business strategies: the
prospector strategy, analyzer strategy, defender strategy, and the
reactor strategy. To exploit new market opportunities, prospectors
exhibit a higher level of advanced environmental scanning activ-
ities than defenders (Subramanian, Fernandes, & Harper, 1993). To
continuously identify market opportunities and threats, prospec-
tors must obtain and use market data (Frambach, Prabhu, &
Verhallen, 2003). The necessity for maintaining adequate market-
intelligence generation may prompt prospectors to conduct MAs.
In contrast, defenders attempt to seal off their existing markets and
customers, and they often have a greater internal focus on the
ef?cient retention of market territories (Valos & Bednall, 2010).
Moreover, those applying a reactor strategy do not respond
consistently to entrepreneurial problems (Slater & Olson, 2001).
Consequently, they may have little need for MAs as a method for
obtaining comprehensive market information. We therefore pro-
pose the following hypothesis:
H3. Business strategies modeled on the prospector strategy are
positively related to the implementation of MAs.
3.1.2. The MA and marketing performance
The reviewof the literature of MA's strategic value suggests that
companies with a well-implemented MA system have a greater
capacity to (a) achieve their stated direct and indirect performance
objectives (Morgan et al., 2002; Brownlie, 1996), (b) derive useful
?ndings, recommendations, and suf?cient knowledge regarding
markets and customers (Mylonakis, 2003), (c) gain strategy-
execution effectiveness, user satisfaction, and organizational
learning (Morgan et al., 2002), and (d) effect changes in market
share and overall ?nancial performance (Taghian & Shaw, 2008).
Furthermore, MAs also facilitate a higher degree of conscientious-
ness and caution toward the business environment, and a more
objective, non-intuitive approach to decision making as a means to
achieve organizational objectives (Sauter, 1999). Hence, the use of
MAs can be highly related to marketing performance (e.g., sales,
market shares, pro?tability, and customer satisfaction). Based on
these rationales, we set forth the following hypothesis:
H4. The implementation of MAs is positively related to marketing
performance.
Fig. 1 summarizes the research hypotheses.
3.2. Measures
We developed a multi-item scale and a 5-point scale
(1 ¼ strongly disagree, 5 ¼ strongly agree) to measure perceived
environmental muni?cence and environmental dynamism,
respectively (Slater & Narver, 1994; Egeren & O'Connor, 1998; Song
& Parry, 2009; Kumar, Jones, Venkatesan, & Leone, 2011). For
business strategies, an ordinal scale based on one proposed by
Miles and Snow (1978) was used. The respondents were asked to
choose one of four descriptions that best characterized their busi-
ness strategy (in increasing order of proactiveness and aggres-
siveness, 1 ¼ Reactor, 2 ¼ Defender, 3 ¼ Analyzer, and
4 ¼ Prospector). However, the descriptions were labeled Type 1,
Type 2, Type 3, and Type 4, without specifying the name of the
business strategy (Rajaratnam & Chonko, 1995). This self-typing
paragraph approach is commonly used in strategic management
research (Slater, Olson, & Finnegan, 2011).
We conceptualized MA implementation as the extent to which
the MA has been implemented. To assess the extent of MA imple-
mentation, we asked respondents to indicate on a 5-point scale
(1 ¼ not ever implemented, 5 ¼ implemented frequently) how often
their organization implements activities of MAs. In the question-
naire, we also de?ned the scope of MA activities and stated that the
MA should be implemented by a person or group which is internal
to the business unit but external from the marketing operation, or
implemented by a management consulting ?rm or practitioner
(Kotler et al., 1977).
Because performance is a multidimensional construct (Slater &
Olson, 2001), we adopted a broad set of indicators, including
?nancial and non-?nancial measures of business performance.
Furthermore, because objective performance measures have been
impossible to obtain at the business level, and subjective measures
have been commonly used in research and shown to correlate with
objective measures of performance (Slater &Narver, 1994), we used
a perceptual, multiple-item, 5-point semantic performance mea-
sure (1 ¼ highly dissatis?ed, 5 ¼ highly satis?ed). The ?nancial
performance measures (market share, sales, and pro?tability) were
drawn from research by Slater and Narver (1992) and Morgan et al.
(2009). The non-?nancial performance measures (customer satis-
faction, competitive advantage, and innovation) were adopted from
research by Morgan et al. (2002), Ambler, Kokkinaki, and Puntoni
(2004) and Pimenta da Gama (2011).
We also used control variables that may affect an organization's
MAs and marketing performance, such as the number of employees
and annual net sales. We selected these variables because of their
potential impact on MAs (Brownlie, 1996) and marketing perfor-
mance (Morgan et al., 2009; Song & Parry, 2009).
To ensure the measures' content validity, we conducted a series
of pretests and interviews to ?nalize the conceptual model and
measures. First, ?ve academic experts with extensive experience in
and knowledge of internal audits and MAs were asked to evaluate
the adequacy of the items. Second, the revised questionnaire was
pretested using a sample of 30 senior marketing executives. They
were asked to complete the questionnaire and provide comments
related to the questionnaire.
3.3. Data collection
A random sample of 800 companies was drawn from
CommonWealth Magazine's list of Taiwan's Top 1000 Manufac-
turers and 500 Service Enterprises in 2009. A package with a copy
of the questionnaire, a cover letter, and a postage-paid return en-
velope was then mailed to senior marketing managers or company
directors. We asked each respondent to refer to either the largest
strategic business unit (SBU) in their organization or the unit with
which they were most familiar. Following the mailing of ques-
tionnaires, we made follow-up phone calls to encourage responses
and to ensure that the informants had a high degree of strategic
decision-making involvement and marketing responsibility in their
organization (Day & Nedungadi, 1994; Menon, Bharadwaj, Adidam,
& Edison, 1999).
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 158
A total of 120 fully completed, usable responses were received
for an effective response rate of 15%. To ensure that non-response
biases were not present, early and late respondents were
compared on all variables of interest by using traditional t-tests
(Armstrong & Overton, 1977). The results of the t-tests indicated
that non-response bias did not appear to be a signi?cant problem.
Based on the recommendations of Podsakoff, Mackenzie, Lee, and
Podsakoff (2003), we also used various procedural and statistical
remedies against the problems of common method variance and
single respondent bias (Guenzi, Georges, & Pardo, 2009), including
(a) guaranteeing respondent anonymity, (b) using established
scales and questionnaire pretests, (c) using varying scale formats
and anchors (e.g., strongly disagreedstrongly agree, never-
dfrequently, highly dissatis?eddhighly satis?ed, etc.); and (d)
Harman's (1967) one-factor test. Our results show that no one-
factor accounts existed for more than 50% of variance in the vari-
ables and that common method variance was present (Podsakoff
et al., 2003). Table 1 presents descriptive statistics of the research
sample.
The research model was evaluated using the PLS (partial least
squares) method instead of covariance-based SEM techniques
because PLS can handle both re?ective and formative constructs
simultaneously (Chin, 1998). Furthermore, PLS does not require
large sample sizes, and it accepts non-normally distributed and
non-intervally scaled (ordinal) data (Ashill, Rod, & Carruthers,
2008). In PLS estimation, indicators must be speci?ed as either
formative or re?ective of latent constructs. Following the method of
Raymond, Julien, and Ramangalaby (2001), we treated the in-
dicators as formative for a company's business strategies, number
of employees, and annual net sales because these indicators
directly help create these constructs. We used re?ective indicators
for environmental muni?cence, environmental dynamism, MA
implementation, and marketing performace because the indicators
reveal the various features of these constructs (Chin, 1998). Before
testing the measurement model, we used principal component
factor analysis to identify the various items de?ning the re?ective
constructs. Our measure validation and measurement model
testing were conducted using SmartPLS 2.0 (Ringle, Wende, & Will,
2005).
The items de?ning the construct of macro environment audits,
marketing strategy audits, and marketing productivity audits were
excluded because their factor loadings were below 0.5 (Hair,
Annderson, Tatham, & Black, 1998). We then grouped the rest of
the items into three constructs: business environment audits
(BEAs), marketing information system audits (MISAs), and MFAs.
We tested the reliability and validity of the measurement model
using PLS. As shown in Table 2, all composite reliability coef?cients
attained the acceptable 0.7 level. The average variance extracted
(AVE) for all constructs were greater than 0.5, supporting the
convergent validity of the measurement items (Fornell & Larcker,
1981).
To evaluate the presence of discriminant validity among con-
structs, the AVE square root should be superior to the correlation
among constructs (Fornell &Larcker, 1981). As presented in Table 3,
all constructs complied with this prerequisite.
4. Results
The structural model can be tested with a path coef?cient (b)
analysis and the explained variance (R
2
) of each endogen construct.
The stability of the estimators was validated by the Student t-test
from a bootstrapping of 200 random samples, and all coef?cients
for all paths in the model were signi?cant at the 0.05 level. The PLS
method simultaneously estimated the measurement and structural
components of the research model, as shown in Fig. 1. To investigate
how the implementation of MAs might be in?uenced by internal/
external factors and the effect of MAs on marketing performance,
alternative models and tests must be compared to examine if MAs
Fig. 1. Research framework.
Table 1
Descriptive statistics.
Industry Frequency Valid (%)
Electrical & Electronic 32 26.7
Engineering/iron/steel 16 13.3
Food 13 10.8
Chemical manufacturing 12 10.0
Information product 4 3.3
Other manufacturing 12 10.0
Medicine 7 5.8
Building/real estate 5 4.2
Financial/insurance 5 4.2
Other services 14 11.7
Employee numbers
1.64 is signi?cant at the p < .05 one-tailed.
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 161
marketing managers and directors, a lesser extent of MA imple-
mentation is conducted, and (b) a proactive business strategy
contributes strongly to the implementation of the MA. The extent
to which MAs are implemented depending on business
environments and strategies highlights the role of MAs in helping
organizations respond accurately to competitive environments,
and ensuring that proactive business strategies are being achieved.
However, the nonsigni?cant effects of environmental dynamismon
the implementation of MAs are inconsistent with our expectations,
which indicate that the question of whether environmental dyna-
mism affects the implementation of MAs merits further investiga-
tion. Few empirical studies have clari?ed the impact of business
environments and strategies on the implementation of MAs. Our
study, however, demonstrates that business environments, espe-
cially environmental muni?cence and different types of business
strategies, can impact the extent to which MAs are implemented.
In this research, we also extend the focus of the MA's impact on
organizational performance from the level of the complete MA to
the level of individual MA activities. Previous research con?rmed
that an effectively implemented MA can result in strategy-
execution effectiveness, customer satisfaction, and the satisfac-
tion of marketing performance objectives (Morgan et al., 2002;
Taghian & Shaw, 2008). This study enhances existing research by
proving that the implementation of individual MAs not only pro-
duces different effects on marketing performance, but also medi-
ates environmental factors (e.g., environmental muni?cence and
business strategies) and marketing performance. Each MA activity
indeed plays a strategic role in determining whether marketing
activities are being accurately and effectively implemented which,
in turn, enhances marketing performance.
6. Managerial implications
This study investigated the correlation between the imple-
mentation of MAs and perceptions of internal/external environ-
ments, and the extent to which MAs can enhance marketing
performance in the context of Taiwanese industries. Our ?ndings
provide scholars and managers with a basis that is considerably
more solid than intuition and anecdotes for recommending the
implementation of MAs. First, our research con?rms that internal/
external environmental factors can affect the choice of imple-
menting MAs. Our ?ndings show that companies confronted with
lowenvironmental muni?cence tend to dedicate more resources to
MAs. From a practitioner's standpoint, MAs should be conducted
periodically to ensure that marketing executives assess the key
Table 5
Explained variance (R
2
), communality, redundancy, and goodness-of-?t (GOF) index
for Models 1, 2 and 3.
Construct Model 1 Model 2 Model 3
Business environment audits
Explained variance (R
2
) 0.157 0.147
Communality 0.778 0.777
Redundancy 0.001 0.044
Marketing information system audits
Explained variance (R
2
) 0.175 0.163
Communality 0.780 0.782
Redundancy À0.008 0.084
Marketing function audits
Explained variance (R
2
) 0.178 0.153
Communality 0.758 0.759
Redundancy 0.005 0.077
Financial performance
Explained variance (R
2
) 0.404 0.282 0.467
Communality 0.941 0.941 0.941
Redundancy 0.152 À0.031 0.141
Non-?nancial performance
Explained variance (R
2
) 0.076 0.238 0.254
Communality 0.751 0.758 0.758
Redundancy 0.008 À0.045 À0.005
Environmental muni?cence
Explained variance (R
2
)
Communality 0.748 0.733 0.743
Redundancy
Environmental dynamism
Explained variance (R
2
)
Communality 0.692 0.693 0.693
Redundancy
Business strategy
Explained variance (R
2
)
Communality 1.000 1.000 1.000
Redundancy
Average
Explained variance (R
2
) 0.198 0.260 0.237
Communality 0.780 0.791 0.783
Redundancy 0.030 À0.038 0.043
Goodness-of-?t index 0.393 0.454 0.431
Fig. 2. Result of the PLS analysis.
W.-K. Wu et al. / Asia Paci?c Management Review 20 (2015) 156e164 162
trends and their implications for marketing actions and that mar-
keting plans and activities proceed in a manner that is consistent
with both consumer needs and the marketing goals of the orga-
nization (Brownlie, 1996; Sidhu & Robert, 2008; Wilson, 1992).
Second, our study shows that companies adopting proactive
strategies tend to reinforce the use of MAs. MAs bring value to a
company by obtaining comprehensive information on the busi-
ness environment and by providing a basis for implementing
proactive business strategies. MAs should therefore be favored by
business managers who want to adopt a proactive strategy and
enhance their company's marketing performance. The more pro-
active a company's business strategy, the more bene?cial and
effective MA become. MA should be supported by business
managers aimed at increasing marketing activities' effectiveness
and performance.
Third, our research con?rms that MAs, particularly the BEA,
MISA, and MFA, contribute signi?cantly to marketing performance.
These audits help marketing managers ensure that marketing
strategies and information systems and activities proceed as
planned, and that they match the needs of the market. Our ?ndings
suggest that the procedures of the BEA, MISA, and MFA should be
formalized by marketing managers because these procedures can
assist companies in implementing effective and ef?cient marketing
plans. We also observed that the greatest contribution of MA ac-
tivities to ?nancial performance lies in the MISA, followed by the
BEA and the MFA, which shows the importance of using the limited
resources of MAs properly on each MA activity. Within the MA, the
MISA prioritizes appropriate marketing information and effective
data-processing systems within an organization. Conversely, the
BEA, which bene?ts non?nancial performance, is an effective tool
for obtaining information on the market environment and
customer preferences. Hence, investments in business environ-
ment analysis and related audits can produce payoffs in marketing
performance.
Finally, our results show that MAs play a mediating role be-
tween environmental muni?cence and marketing performance
(i.e., ?nancial and non?nancial performance), and between busi-
ness strategies and ?nancial marketing performance. Therefore,
MAs are instrumental in enhancing the effectiveness of a market
orientation strategy and helping proactive strategic behavior,
thereby ensuring adequate, timely and effective use of market
information, which then leads to a more enhanced marketing
performance. Managers should consider the strategic value of
MAs and focus on methods to strengthen the implementation of
MAs.
7. Research limitations and ideas for future research
Although the surveys in this study were conducted with
knowledgeable marketing decision-makers, problems associated
with self-reported data based on mail surveys may still exist.
However, analyses of the multi-item scales provide supporting
evidence for the reliability and discriminant validity of the mea-
sures. Future research might include the identi?cation of other
variables, such as the MA implementation process, the various
levels of market development, and the signi?cance of the MA as
perceived by managers, which are also likely to mediate the re-
lationships between the MA and marketing performance. More-
over, future studies should consider the in?uence of marketing-
resource deployment methods and use variable measures of the
MA to investigate different types of businesses. Finally, using larger
national samples can facilitate in the testing and comparison of
potential differences in MAs on an international level, and struc-
tural equation methods can be used to verify the related ?ndings.
Con?ict of interest
All contributing authors declare no con?icts of interest.
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