To cite this article: Belinda Dewsnap & David Jobber (2000) The Sales-Marketing Interface in

Consumer Packaged-Goods Companies: A Conceptual Framework, Journal of Personal Selling &

Sales Management, 20:2, 109-119

The Sales-Marketing Interface in Consumer Packaged-Goods

Companies:

A Conceptual Framework

Belinda Dewsnap*

Lecturer in Marketing

Business School, Loughborough University, Loughborough, UK, and

David Jobber

Professor of Marketing

University of Bradford Management Centre, Bradford, UK

*
To whom correspondence should be addressed.
Telephone: +44 (0) 1509 223137 Fax: +44 (0) 1509 223961 E-mail: b.dewsnap@lboro.ac.uk
 The Sales-Marketing Interface in Consumer Packaged-Goods

Companies:

A Conceptual Framework

Abstract

For those companies marketing branded consumer packaged-goods to an increasingly

powerful retail trade, collaborative relations within the marketing function are crucial,

particularly between trade customer-focused sales personnel and brand-focused marketing

personnel. Yet although there is a well-developed body of literature on marketing’s relations

with other major business functions, relations within the marketing function itself remain

unresearched. Drawing on theory and empirical results from studies of marketing’s cross-

functional interfaces, the authors develop a framework for understanding the nature, causes

and effects of relations between sales and marketing in consumer packaged-goods firms.

Propositions to guide further research are also developed.

2
 Consumer-packaged goods firms face unprecedented levels of distributive trade strength

and sophistication (Brady and Davis 1993; Lehmann and Winer 1997). Brand prosperity now

depends on delivering satisfaction to both the end consumer and to the retailer (Mitchell

1994a; Wellman 1995). This drives the highest levels of interdependence between the sub-

functions of marketing, particularly between retailer-focused sales personnel and brand-

focused marketing personnel. This in turn mandates close and collaborative relations

between the two groups (Cespedes 1993, 1994; Corstjens and Corstjens 1995). However, the

sales-marketing interface, whilst strongly interdependent, is reported as neither collaborative

nor harmonious. In the sparse literature that exists, the relationship is characterized by a lack

of cohesion, poor co-ordination, conflict, non-cooperation, distrust, dissatisfaction, and

mutual negative stereotyping (Anderson 1996; Carpenter 1992; Corstjens and Corstjens 1995;

Martin and Powers 1989; Richards 1995; Shocker, Srivastava, and Ruekert 1994; Strahle,

Spiro, and Acito 1996; Urbanski 1987; Wellman 1995; Wood and Tandon 1994).

There is ample research output on marketing’s relations with other major functions,

particularly with the R&D and manufacturing functions (e.g., Gupta, Raj, and Wilemon 1986;

Gupta and Wilemon 1988; Mukhopadhyay and Gupta 1998; Ruekert and Walker 1987; Song,

Montoya-Weiss, and Schmidt 1997). The majority of this empirical work is oriented to the

interfaces relevant for new product development, and all of the work, given its focus on

‘global’ functional groups, treats marketing and sales synonymously. Academic research has

to date, however, neglected relations between the marketing sub-functions. This paper

therefore develops a research framework to enhance the understanding of the interface

between the sales and marketing sub-functions.

3
 The specific focus of consumer packaged-goods is justified by the external trading

pressures faced by these firms. The practice of marketing only to the end consumer and of

using the retail trade as a mere distribution conduit to these consumers proved inadequate and

inappropriate from the mid-1980s onwards (Lehmann and Winer 1997). Increasingly

sophisticated retail buyers in central buying offices, armed with increasing amounts of timely

retail sales data and with rapidly growing retailer own-brand franchises (Cespedes 1993)

signal the need for sales personnel to apply marketing principles to the trade so that their

colleagues in consumer marketing can develop marketing programmes (e.g., brands and

promotions) which meet the needs of the trade and receive ready adoption by them (Wellman

1995).

The aim of this paper is to draw on theory and empirical findings on marketing’s relations

with other functional groups in order to propose a foundation which addresses the research

opportunity identified previously. A conceptual framework for the study of the sales-

marketing interface in consumer packaged-goods firms and a set of research propositions are

thus proposed. This model follows the convention set in previous studies of marketing’s

interfaces in which relations are measured on the basis of the level of intergroup integration.

In this same tradition the framework outlined here is designed to help address these important

questions: (1) What organizational factors affect the perceived level of integration achieved at

the sales-marketing interface? (Recent structural changes in marketing, for example the

move to incorporate category management, are a key subset of this.) (2) How much

integration is perceived to currently exist between sales and marketing? (3) How does the

perceived level of integration achieved affect business performance? In terms of focus, our

interest is the interface between brand management and those sales personnel referred to by

Cespedes (1992) as “headquarters key account managers”. However, for the sake of brevity,

4
the remainder of this paper will use ‘sales-marketing’ as the proxy for this interface.

The paper is organized as follows. The next section introduces the conceptual framework,

followed by an outline and definition of the key concept of integration. Subsequently the

literature which underpins it is reviewed, and research propositions developed. To conclude

the paper we offer some directions for future empirical research, and highlight the managerial

implications arising from it.

Conceptual Framework and Literature Review

The proposed model for the study of the sales-marketing interface is shown in Figure 1. Drawing on

empirical investigations of marketing’s cross-functional interfaces, the model includes a set of organizational

factors as antecedents of integration, the integration variable itself, and the consequences of integration for

business performance.

______________________

Place Figure 1 about here

______________________

The key premises which underlie the framework are as follows:

• Perceived level of integration achieved: It is proposed that achievement of sales-

marketing integration is affected by a range of organizational factors, for example,

elements of structure and senior management behaviour. (Propositions 1 to 10)

• Integration and business performance measures: As integration between business groups

is a means to an end, integration is linked to business performance. (Proposition 11)

5
Organizational Integration

The concept of organizational integration is central to the existing studies of marketing’s cross-functional

interfaces and also to the research framework proposed here. Interest is focused on measuring the factors which

facilitate integration (Propositions 1 to 10), and the implications of the achieved level of integration for business

performance (Proposition 11). To provide the necessary context we now define the concept and discuss the

requirement for integration at the sales-marketing interface.

Integration Defined: In a very useful review of the integration concept, Kahn (1996) outlines

how interdepartmental integration has been characterized in the new product development

literature in three ways. The first focuses on interaction and emphasizes the use of

communication in the form of meetings and information flows between departments (e.g.,

Ruekert and Walker 1987). The second has portrayed integration as collaboration, where

departments work collectively towards common goals (Lawrence and Lorsch 1967). The

final group of literature has implied a multi-dimensional perspective of integration (Gupta,

Raj and Wilemon 1985, 1986; Song and Parry 1992, 1993), operationally defined as

‘information sharing’ and ‘involvement’. Kahn’s own research supports a multi-dimensional

view of integration, based principally on collaboration but where certain elements of

interaction are also relevant. Kahn’s results support his hypothesis that although a certain

level of interaction is necessary, such interaction alone does not lead to product

development/management success. It is “collaboration”, measured in terms of mutual

understanding, team working and shared corporate vision, which has the stronger impact on

performance. The conceptual model presented here therefore incorporates this broader

conceptualization of integration based on both interaction and collaboration.

The need for sales-marketing integration: The segmenting of an organization into

functions/departments which are specialized to deal with a particular part of the external

6
environment, and the simultaneous need to unify their efforts, denote the organizational states

of differentiation and integration (Lawrence and Lorsch 1967). Differentiation is usually

reflected in differences in orientation which in turn lead to problems in achieving integration

and inter-departmental collaboration. However, based on the need for greater functional

specialization and on account of the interdependence that exists between organizational

groups, effective organizational functioning depends on the achievement of both

differentiation and integration (Song and Parry 1992). Separate sales and marketing

departments, the former focused on the trade customer and the latter on the consumer of the

brand, indicates differentiation within the marketing function. The sales and marketing sub-

functions in any trading sector, but particularly in the current trading environment of

consumer packaged-goods, are interdependent in the sense that each requires information

and/or more tangible deliverables from the other in order to accomplish their individual

functional objectives (Cespedes 1993, p.54). For instance, marketing require that their sales

counterparts manage the interface with the retail trade in a manner which optimizes the

trading platform for the company’s brands, and in terms of tangibles look to sales to supply

them with information on the marketplace and on distributor requirements. Sales personnel

on the other hand depend on marketing for any consumer/brand-related information which is

needed to manage the trading relationship. Sales also ultimately depend on marketing to

produce consumer propositions (for example, new products and promotional campaigns)

which are acceptable to their trade customers and which also ensure achievement of brand

and company objectives. Sales and marketing integration is also required to ensure that

jointly commercial strategies are designed which support marketing’s objectives for brands

and sales’ trade customer objectives (Corstjens and Corstjens 1995, p.293). Finally, as retail

customers become more focused on the management of categories, so both sales and

marketing need jointly to develop category knowledge and expertise (Armstrong et al. 1996,

7
p.127). The need for integration between the separate but interdependent sub-functions of

sales and marketing is therefore implicit in the development of this conceptual framework.

A review of the literature on marketing’s cross-functional relations now follows.

Empirical Research on Marketing’s Cross-functional Interfaces

A review of the substantial literature on marketing’s relations with other functions,

principally with R&D, suggests that there is a positive relationship between organizational

practices and the perceived level of integration achieved between the functional groups

(Tables 1a and 1b). This literature also reports a positive relationship between the perceived

level of cross-functional integration achieved and business performance outcomes (Table 2).

In the absence of any models that directly relate to the sales-marketing interface, the

framework presented here (Figure 1) posits the same relationship among these factors for this

interface. This is a reasonable assumption since the importance of integration between the

interdependent sales and marketing functions is no less vital to effectiveness than relations

between marketing and other interdependent groups; and the types of variables studied (e.g.,

formalization and centralization) are generalizable rather than specific to the marketing/R&D

domain. Further, the factors found to positively impact on levels of integration between

functions, for example elements of organizational structure and senior management

behaviour, are facets that can be controlled and deployed by all managers in an organization

regardless of function.

8
Antecedents of Sales-Marketing Integration (Propositions 1 to 10)

The thesis of this paper is that to achieve the highest levels of sales-marketing integration,

organizational practices must be conducive to integration. Empirical evidence which is

summarized in Tables 1a and 1b and reviewed in the following sections suggests a link

between marketing-R&D/manufacturing integration and the following organizational factors:

(1) elements of organizational structure, (2) senior management actions, and (3) operating

characteristics at the interface. All of these existing studies of marketing’s cross-functional

relations have as their foundation a model of the marketing-R&D interface which was

proposed by Gupta, Raj and Wilemon (1986) and which is built on the three organizational

factors outlined above. Below we argue the relevance of these factors for our conceptual

framework.

___________________________

Place Tables 1a and 1b about here

___________________________

Organizational Structure

Elements of organizational structure that have been found in the existing studies of

marketing’s cross-functional relations to positively impact on levels of integration and on this

basis are considered relevant to the sales-marketing interface are: (1) formalization, (2) de-

centralization and participation in decision making, (3) physical proximity, and (4) methods

of organizing. These factors are now discussed in turn.

9
Formalization

The extent to which an organization clearly defines roles, responsibilities and performance

standards is referred to as formalization (Gupta et al. 1986, p.10). The consensus of findings

from studies of marketing’s cross-functional relations suggest that higher levels of

formalization are associated with higher levels of integration (Gupta, Raj, and Wilemon

1987, Gupta and Wilemon 1988, 1991; Ruekert and Walker 1987). However, evidence from

research in Japanese companies (Song and Parry 1993) does not support a positive

relationship between formalization and integration. High levels of formalization were found

to reduce the flow of information between functions. The authors suggest that their results

could indicate that the written procedures and guidelines drafted by Japanese firms neglect to

specify where interaction between departments is necessary. Further, a study by Parry and

Song (1993) only finds support for the positive integrating effects of formalization at the

budgeting stage of the new product development process, and they also note that it may be

appropriate to re-define formalization on the basis of “R&D-marketing relations” (p.19).

The balance of evidence supports the link between formalization and perceptions of R&D-marketing

integration, and we therefore propose its relevance to the sales-marketing interface. The clarification of sales

and marketing roles and responsibilities, combined with the establishment of procedures and processes for

interaction (e.g., the institution of monthly intergroup meetings) would serve to ensure that sales and marketing

personnel feel no ambiguity over their role in the commercial process (Ruekert and Walker 1987). Moreover,

they would interact with each other regularly to exchange brand and trade customer information (Moenaert et al.

1994) and to review commercial plans; processes which would serve to generate an atmosphere of collaboration

and joint problem-solving. It is therefore proposed that:

P1 The higher the perceived level of formalization in an organization, the

greater the perceived degree of achieved integration between sales and
marketing.

10
De-centralization

Centralization refers to both the organizational level at which decision making occurs and

the degree of employee participation in decision making, where higher degrees of

centralization correspond with concentration of decision making authority at more senior

levels. Research suggests that cross-functional integration is positively related to de-

centralized decision making (Gupta, Raj, and Wilemon 1987, Gupta and Wilemon 1988;

Moenaert et al. 1994), and to increased participation in decision making (Gupta, Raj, and

Wilemon 1987; Song and Parry 1993). There are findings from research in Japanese firms

(summarized in Table 1) which do not support the link between de-

centralization/participation and integration. The authors explain their equivocal findings on

‘de-centralization’ on the basis of their Japanese sample, pointing out that de-centralized

decision making may be more associated with older and more mature firms than with the less

mature high-technology firms of their sample. With respect to ‘participation’, based on the

emphasis accorded participative decision making in descriptions of Japanese management,

Parry and Song (1993, p.18) admit surprise that their results fail to support the participation-

integration hypothesis. They suggest that their findings may well have been affected by the

fact that their sample comprises only R&D managers, and therefore ignores how other R&D

personnel perceive participative decision making levels.

Relating the positive findings for de-centralization/participation to the sales-marketing

interface, we would expect that increased involvement in decision-making at lower levels,

combined with the power to make decisions, would help create an environment where sales

and marketing personnel are motivated to resolve their problems at ‘their level’. In so doing,

they would communicate freely and frequently with each other with little consequent

inclination to withhold information from each other. In addition, as Gupta and Wilemon

11
(1988) showed, the credibility of the information and of the information-provider would also

be enhanced. Finally, the frequent flows of high quality information between sales and

marketing would also be associated with higher levels of mutual understanding and

appreciation (Moenaert et al. 1990, 1994), the more affective aspects of integration which

Kahn (1996) termed “collaboration”. The above discussion leads to the following

propositions:

P2 The higher the perceived level of de-centralized decision making in an

organization, the greater the perceived degree of achieved integration
between sales and marketing.

P3 The greater the perceived degree of employee participation in sales-

marketing decisions, the greater the perceived degree of achieved integration
between sales and marketing.

Physical Proximity

Gupta et al. (1985, 1987) found that high levels of marketing-R&D integration were

associated with the extent to which the two functions were physically close to each other.

Griffin and Hauser (1996) also noted that long distances between groups serve as a barrier to

face-to-face communication and lead to decision-making delays. Accordingly these same

authors build the physical location of different functions as an integrating mechanism into

their conceptual framework. Based on this evidence we now argue that the physical location

(i.e., the allocation of office space) of head-office based sales people, for example key

accounts managers, vis-à-vis their counterparts in marketing is an important consideration.

As such, any study of the sales-marketing interface should seek to explore the relationship

between physical proximity and sales-marketing integration. For this purpose the following

proposition is advanced:

P4 The closer the sales and marketing functions are physically located, the
greater the perceived degree of achieved integration between them.

12
Methods of Organizing

The innovation-related studies of marketing’s cross-functional relations measure the

impact of organizational integrating mechanisms on perceived levels of achieved intergroup

integration (e.g., Griffin and Hauser 1996; Gupta, Raj and Wilemon 1985, 1986, 1987; Gupta

and Wilemon 1988). Lawrence and Lorsch (1967) in their seminal study on organizational

differentiation and integration report that integration mechanisms such as integrating teams

and departments are required to provide the requisite degree of cross-functional integration.

The actual type of integrative device, they argue, is determined by the type of

interdependence that exists between groups. The “reciprocal interdependence” (Thompson

1968) between sales and marketing, involving “mutual exchanges of functional task

performance and information that both departments need to do their job” (Ruekert and

Walker 1987, p.15), requires that the integration be achieved through “mutual adjustment” or

face-to-face contact (Thompson 1968). This implies the use of individual integrators,

integrating departments or cross-functional teams (e.g., Gupta, Raj and Wilemon 1987;

Olson, Walker and Ruekert 1995).

By way of response to increasing retailer sophistication and strength, consumer packaged-

goods firms are experimenting with new organizational designs and philosophies for

marketing which explicity incorporate sales (trade-customer) and marketing (consumer and

brand) perspectives (Keller 1998; Lehmann and Winer 1997; Mitchell 1994b). Such

infrastructural change is based on the well-acknowledged fact that brand success depends on

the supplier’s development of strategies which balance the needs of the retail trade-customer

with those of the supplying company’s own brand(s) (Corstjens and Corstjens 1995; De

Chernatony 1996; Wind and Robertson 1983). The most prevalent new structures and

13
philosophies for marketing are trade marketing and category management (e.g., Cespedes

1993; Davies 1993; George, Freeling and Court 1997; Low and Fullerton 1994; Richards

1995).

Trade marketing roles and departments have been implemented in many firms as a device

to integrate sales and marketing, and to ensure their collaborative working (Bidlake 1990;

Cespedes 1993). As Davies (1993) points out, a trade marketing approach acknowledges the

need to apply basic marketing principles to an increasingly powerful retail trade. As a

process to integrate sales and marketing strategies, trade marketing is designed to ensure that

the retailer’s basic needs are met by the brand marketing mix co-ordinated by consumer

marketing personnel (Harlow 1994). At the level of the individual retailer this could, for

example, necessitate the translation of national promotions strategy into trade promotions

tailored to each customer’s individual requirements (George, Freeling and Court 1997).

Category management could also act as an integrating mechanism between sales and

marketing. In its definition and its deployment it can be seen as strategic trade marketing

(Harlow 1994). It represents an attempt strongly advocated by Corstjens and Corstjens

(1995, p.293) to develop trade and brand/consumer strategies in parallel; effectively to

integrate the two core strands of strategy. Category management is defined explicitly as an

approach which enables both trade customer and supplier to grow category turnover and

profit by “the strategic management of product groups through trade partnerships which aim

to maximize sales and profit by satisfying consumer needs” (Institute of Grocery Distribution

1997, p.6). In this context both retailer and supplier jointly develop category strategy; and

trade-customer and brand objectives are articulated a priori in terms of the trade customer

definition of the product category, not in terms of the brand itself.

14
 The literature identifies how category management has been operationalized on two levels:

firstly at the internal level of the brand, and secondly at the external level of the retail trade

customer. Pioneered by Procter & Gamble in the late 1980s (Schiller 1988) and reported to

be in place in most consumer packaged-goods firms (Freedman, Reyner, and Tochtermann

1997), the internally-focused category management role is based on the strategic management

of brands at the level of the product category. It marks an evolution from the classic brand

management structure where - it is argued - each brand competes for organizational resources

and market share, to a model based on category business directors who lead cross-functional

teams. As an example, George et al. (1997) outline how in one major consumer packaged-

goods company the category business director, described as a “product integrator”, leads a

team which includes representatives from sales, operations, R&D, finance, market research,

and brand management. Significantly, the sales representative on this team provides the

integrative link with the externally-focused category management team described below.

In contrast to the internally-focused integrating role, consumer packaged-goods firms are

reported to have created an externally-focused category management role (Freedman, Reyner,

and Tochtermann 1997). Externally-focused category management has been described as a

role which supports the key account manager to develop retailer-specific long-term category

trade plans (George, Freeling and Court 1997; Kermouch 1994). George et al. (1997) outline

how in the organization referred to above category managers form part of a “customer

business team”. The traditional geographic approach to selling in which account managers

cover multiple retailers in their territories has been superseded by a customer- and category-

based model in which each major customer is assigned to a dedicated customer business

manager. The customer business manager (termed a “customer integrator”) heads the new

15
customer business team and is supported by (1) the category manager described above; (2)

customer planners responsible for the traditional trade marketing tasks of tailoring national

objectives and strategies to each customer’s individual requirements; (3) sales information

specialists who deliver category management expertise to the team; and (4) supply chain

specialists responsible for delivering improvements in customer-specific supply chain

efficiencies.

With respect to the use of integrating teams, Gupta et al. (1987) found that temporary task

forces, venture teams and product, project or matrix managers were methods widely used by

the high-integration companies in their new product development efforts. Mohrman (1993)

states that to cope with current environmental demands requires that an organization develops

cross-functional teams dedicated to products, projects or customers. Brand management has

traditionally operated on the basis of cross-functional teams at the product level (George,

Freeling and Court 1997; Wellman 1995). How and at what level(s) new structures for

marketing such as the customer- and category-based teams described above operationalize

these principles is fundamental to the conceptual framework presented here.

The extent to which the above structural changes facilitate the integration between the sales and marketing

groups is central to an understanding of sales-marketing relations, and in view of the different structures for

marketing now being experimented with, inclusion of organizational integrating mechanisms as an antecedent

factor in the conceptual framework is unequivocal. The associated proposition is as follows:

P5 Specific organizational methods designed for integrating sales and

marketing (including trade marketing and category management) will
positively influence the perceived degree of achieved sales-marketing
integration.

16
The Effects of Senior Management Actions

According to McCann and Galbraith, the management of interdependent intergroup

relations demands the continuous creation and maintenance of “shared appreciations of

interdependencies” (1981, p.68). Reinforcing this view, many studies indicate that senior

management support is an important determinant of the achieved level of marketing-

R&D/manufacturing integration. We propose that these empirical results can usefully be

applied to the sales-marketing interface, and based on the empirical evidence we suggest that

senior managers have two key levers to facilitating sales-marketing integration. The first of

these is the way in which they can promote the value of sales-marketing integration and

correspondingly provide opportunities for sales and marketing personnel to develop mutual

understanding; the second is their scope to implement joint reward systems.

Many studies suggest that integration is positively related to the way in which top

management actively support the value of integration between functional groups (e.g., Gupta,

Raj, and Wilemon 1985, 1987; Gupta and Wilemon 1988; Song and Parry 1993; Song,

Montoya-Weiss, and Schmidt 1997). The value placed on integration is inculcated in the

corporate culture and is underlined by the organizational practices which senior managers

support and by the opportunities they provide for functional groups to develop strong levels

of mutual understanding (Gupta, Raj, and Wilemon 1987). For the sales-marketing interface

it is our contention that practices such as job rotation, cross-functional training and dedicated

project teams (e.g., category management teams), joint visits to customers, and joint project

reviews (perhaps in the context of the prescribed monthly meetings mentioned in the

discussion of ‘formalization’ above) would all provide a platform for cross-functional

interaction, information flow and the generation of mutual understanding. Summarizing

these arguments, the associated propositions are as follows:

17
 P6 The greater the perceived level of senior management promotion of the
value of sales-marketing integration, the greater the perceived degree of
achieved sales-marketing integration.

P7: The more that senior managers are perceived to provide opportunities for
sales and marketing personnel to develop mutual understanding, the greater
the perceived degree of achieved sales-marketing integration.

Griffin and Hauser (1996) cite the “cultural thought worlds” created by differences in

training and background as a barrier to interfunctional integration. These authors then go on

to include the factor of “personnel movement” as an integrating mechanism in their

conceptual framework. In their study of Japanese high-technology firms, Parry and Song

(1993) found that one of the most important determinants of R&D-marketing integration was

the “business background” of R&D personnel. Commercial experience outside of their

technically-oriented core discipline was perceived to act as a facilitator to shared

understanding. Relating this to the sales-marketing interface we would hypothesize that

integration would be enhanced where the training and career paths of sales and marketing

personnel encompassed exposure to the challenges and objectives experienced by each other.

Thus we posit that in the situation where sales personnel have some direct experience of

brand-related work and where marketing personnel have some direct experience of working

with trade customers their levels of interaction, information sharing and collaboration would

all be enhanced. Following the convention set by Parry and Song (1993) this factor relating

to background and experience is captured under the same heading as ‘senior management

actions’. Aside from empirical precedent, however, the fact that the strategy for career

development falls within the jurisdiction of a firm’s top management justifies its association

with senior management behaviour. The proposition advanced is as follows:

P8 The perceived degree of achieved integration is an increasing function

18
 of the number of sales personnel with brand-related experience, and
marketing personnel with trade-related experience.

How the organization rewards its R&D, manufacturing and marketing managers for new

product results has been found to impact integration. For instance, both R&D and marketing

managers in high-integration firms felt that they shared equally in the rewards from

successful new product outcomes, and correspondingly both groups felt a joint responsibility

for the success or failure of any project (e.g., Gupta, Raj, and Wilemon 1987; Gupta and

Wilemon 1988; Song, Montoya-Weiss and Schmidt 1997). Earlier we asserted that, in a

situation where success depends on achieving trade support for brand initiatives, sales (trade-

customer) and marketing (brand) objectives and strategies should be balanced. On this basis

marketing strategies should be congruent with trade customer objectives; sales strategies with

brand objectives. Consequently, marketing should develop new products and promotional

campaigns which deliver both their own brand objectives and the retailer’s objectives; and

sales should seek to develop trading strategies (e.g., product range, merchandizing,

promotions and product replenishment) which ensure achievement of both their company’s

brand objectives and the retailer’s objectives. In this way sales would move away from a

singular focus on the generation of sales volume to the achievement of profitable sales

volume using strategies supportive of the brand values developed by their counterparts in

marketing. The adoption of a category management approach and allied structural

mechanisms (see previous section) may force this agenda of shared objectives. Sales

historically have been retailer-focused and targeted with achieving volume objectives;

marketing consumer/brand-focused and targeted with profit-responsibility (Lehmann and

Winer 1997). In the context of category management, however, sales personnel adopt the

twin-focus of trade and consumer, and both sales and marketing personnel share objectives

and concomitant rewards based on volume and profitability (Nielsen 1992, p.106-7).

19
 In summary we propose that senior management can facilitate sales-marketing

collaboration by deploying rewards for the achievement of joint sales and marketing

objectives:

P9 The more that sales and marketing personnel perceive that they are
jointly rewarded for successful business outcomes, the greater will be
the perceived degree of achieved sales-marketing integration.

Sales-Marketing Operating Characteristics

Previous studies have linked perceived levels of R&D-marketing integration to elements of

the cross-functional operating climate, variously referred to as “harmonious operating

characteristics” (Gupta, Raj, and Wilemon 1986; Gupta and Wilemon 1988), the “quality of

relations” (Gupta, Raj and Wilemon 1987; Song and Parry 1993), and “harmonious

operations” (Griffin and Hauser 1996). It is reported that in high-integration firms the

intergroup operating characteristics involve the following: (1) cross-functional interactions

that exhibit a high level of “give-and-take”, (2) both functional groups involved from the

earliest stage of any project, and (3) conflicts resolved at low levels in the organization

(Gupta, Raj, and Wilemon 1987; Gupta and Wilemon 1988; Song and Parry 1993).

For the sales-marketing interface the notion of “give-and-take” would assume each group

able to challenge the other in their meetings and discussions, and that each would try to

understand the other’s point of view. Following Gupta et al.’s (1987, p.41) findings on the

impact of involving both marketing and R&D groups from the earliest stages of new product

development, we propose that the process of involving both sales and marketing groups from

the outset in discussions on any new commercial initiatives would facilitate communication

between them and assist in the generation of mutual understanding. Finally, “harmonious

20
operating characteristics” at the sales-marketing interface would ensure that when conflicts

arise they would be confronted rather than ignored, and moreover they would be resolved co-

operatively.

Operating characteristics at the sales-marketing interface which meet the three

“harmonious” conditions would be associated with a higher degree of collaboration and

interaction; in short, to higher levels of intergroup integration as we have defined this

concept. Summarizing the above and subsuming all three elements of the sales-marketing

operating climate for integration under the heading “harmonious operating characteristics”,

we propose that:

P10 The more harmonious sales-marketing operating characteristics,

the greater the perceived degree of achieved sales-marketing integration.

Integration and Business Performance (Proposition 11)

A key component of the conceptual framework (Figure 1) is the proposition that the level

of integration achieved between sales and marketing positively affects business performance.

There is much empirical evidence in the new product development literature that cross-

functional integration has a strong positive relationship with innovation success (see Table 2).

______________________

Place Table 2 about here

______________________

21
This proven association between high integration (- conceptualized as interaction and

collaboration) and successful new product outcomes has significant intuitive appeal for

application to outcomes in the sales-marketing context; indeed to any business outcomes

which are dependent on the interaction and collaboration between groups for their

achievement. Thus it is proposed that where individuals in sales and marketing meet

regularly with each other to exchange information, to agree and review overall commercial

plans, and to develop mutual understanding, the chances of actually achieving these joint

plans is enhanced. The idea of a “commercial” plan which reflects both marketing (brand)

and sales (trade customer) perspectives is based on advice given by Corstjens and Corstjens

(1995, p.293) in their discussion of strategies for dealing with today’s powerful retail trade.

It seems appropriate to propose that relevant success outcomes for the sales-marketing

interface will similarly reflect brand and trade perspectives:

P10 The perceived degree of achieved sales-marketing integration is positively

related to both brand-related and trade-related measures of business
performance.

Conclusions and Future Research Directions

The swing in the balance of power towards the retail trade customer drives the need for high

levels of interdependence and integration between trade-focused sales personnel and

consumer-focused marketing personnel in consumer packaged-goods firms (e.g., Corstjens

and Corstjens 1995). Considerable empirical effort and focus has been attributed to

marketing’s interface with other major business functions. Notably all of this empirical work

treats marketing and sales synonymously, and in fact all except the Lawrence and Lorsch

(1967) study use the term ‘marketing’. However, relations within the marketing function

itself remain unresearched and poorly understood. This paper proposes a conceptual

22
framework and a set of propositions under which the sales-marketing interface can be

systematically explored and better understood.

Research Implications

The conceptual model proposed above (Figure 1) interrelates the determinants and effects

of integration. It is proposed that a range of organizational factors will facilitate sales-

marketing integration and that the integration achieved has consequences for business

performance.

A key contribution to the academic community is that the framework provides a

conceptual basis for understanding sales and marketing relations, and also forms a foundation

for researching this important domain. As such the main aims of initial field research in this

area should be exploratory: to gain further insight into the research problem, and to refine and

measure the variables proposed by the framework.

Given the power base of multiple grocery retailers we suggest that firms marketing

consumer packaged-goods in this channel would be the ideal context for initial empirical

investigation. It is suggested that in-depth interviews be held with managers from as many

groups as are relevant to the task of gaining a thorough understanding of the context for

intergroup relations within the consumer packaged-goods marketing function. As new

organizational forms for marketing are central to this study, a key part of this first stage will

be to secure a sound understanding of what is meant empirically by any terms associated with

these new forms, for example trade marketing and category management.

Future research should seek to test the framework in other trading sectors. In particular it

23
would be interesting to investigate how different sales and marketing tasks and projects

influence interactions and interdependencies between the two sub-functions, and why

different types of organizational structures and coordinating mechanisms for marketing are

better suited to manage the interfunctional interdependencies that are involved in

accomplishing the different sales-marketing tasks.

Managerial Implications

The value of the framework to practitioners lies in the potential findings from empirical

research based on it for two totally interdependent organizational sub-groups. (Martin and

Powers 1989). To the extent that business performance outcomes could be affected by the

state of relations between sales and marketing, any findings which reveal the determinants,

nature and effects of sales-marketing relations will be relevant to those managers involved in

the organizational design and management of the total marketing function.

More specifically the managerial implications relate to the range of organizational

variables included in the conceptual framework. Thus our model provides guidance to those

responsible for structuring the sales-marketing organization: setting and managing the

formalization of roles, responsibilities and processes; establishing levels of decision making

authority and involvement (centralization and participation); putting in place integrating

devices such as trade marketing units; and engineering the spatial separation of sales and

marketing, perhaps by the manner in which office space is allocated. The model benefits

senior managers responsible for establishing the culture for high integration, pointing to how

their support for joint working and training initiatives (e.g., their deployment of the

significant human resources required to develop category management expertise), and the

way in which they reward functions for achieving joint objectives, can positively impact on

24
levels of sales-marketing collaboration. Senior management also have the scope to establish

the operating characteristics at the sales and marketing interface. Thus, levels of integration

may be affected by the willingness of managers to engage in open and honest debate, to face

conflicts and to collectively work a way around them.

Finally, the model’s proposal that integration will positively impact the achievement of

sales and marketing objectives underlines its key relevance for managers as a critical link to

performance outcomes. This also then serves to support all of the structural and managerial

actions found to generate integration between sales and marketing.

25
 Figure 1: A Model for the Study of the Sales-Marketing Interface

P1- 10 P11

Organizational Perceived Degree Business

Factors of Intergroup Performance
Integration (Brand & Trade)

Explanation of “Organizational Factors” referred to in Figure 1

1. Structural 2. Senior Management 3. Operating Characteristics

- Formalization
- De-centralization
- Participation
- Physical Proximity
- Methods of Organizing
- Values integration - Give-and-take
- Provides Opportunities - Early involvement
- Background of Personnel - Conflict resolution
- Joint Rewards

26
 Table 1a
Theoretical and empirical evidence linking Organizational Structure with cross-functional integration

Researcher(s) Year Organizational Structure

Formalization De-centralization (DC) Participation (P) Physical Proximity Methods of Organizing
(F)
Gupta et al. 1985 Lack of role clarity seen as Spatial separation of “Ineffective
barrier to integration. departments seen as organizational design”
barrier to integration. cited as a barrier to
integration.
Gupta et al. 1986 Proposition: Lower F > Higher Proposition: Higher DC > Proposition: Higher P > Factor included in model. Factor included in model.
Conceptual integration. integration. Integration.
Paper
Gupta et al. 1987 High –integration firms High-integration companies High-integration firms A positive factor for High integration
characterized by clarity of characterized by a high degree encouraged participation integration. companies used task
roles and performance of decentralization. at all levels within R&D forces, teams , project
standards. and marketing. managers.
Gupta and 1988 Formalization correlated Centralization found to have a
Wilemon positively with higher levels of negative correlation with
cooperation. R&D-marketing cooperation.
Gupta and 1991 Clarification of roles and Response: Delegating > Reducing spatial Organizational structures
Wilemon formalization of new product authority/responsibility to separation cited as a proposed as a method to
development processes cited as lower levels would enhance factor for improving institutionalize integration
facilitators of improved intergroup relations. intergroup relations. (e.g., liaison roles).
relationships.
Song and Parry 1993 Hypothesis: Lower F> Hypothesis: DC>I not Hypothesis: Higher
integration supported. supported. P>integration supported.
Parry and Song 1993 Hypothesis: Lower F> Hypothesis: DC>I not Hypothesis: Higher
integration not supported. supported. P>integration not
supported.
Moenaert et al. 1994 F of project activities increases Project centralization related
communication flows. negatively to communication.
Griffin and 1996 Formal integrative manage- DC as a facilitator of “Relocation and Physical “Organizational
Hauser ment processes included in integration included as part of Facilities” included in Structures” included in
Conceptual conceptual framework as an “organization structures” in conceptual framework as conceptual framework as
Paper integrating mechanism. conceptual framework. an integrating mechanism an integrating mechanism

27
 Table 1b
Theoretical and empirical evidence linking (1) Senior Management Actions and (2) Operating Characteristics with cross-functional integration

Researcher(s) Year (1) Senior Management (SM) (2) Intergroup Operating

Actions Characteristics (OC)
(1) Values Integration Background of Personnel (1) Give-and-take
(2) Provides opportunities for integration (2) Early involvement
(3) Joint Rewards (3) Conflict resolution methods
Gupta et al. 1985 (1) Lack of SM support seen as a barrier to Personality and cultural differences seen as a Long-standing adversarial relations seen as a
integration. barrier to integration. barrier to integration.
(3) Promotion of performance measures that
block integration seen as barrier.
Gupta et al. 1986 (1) and (3) Included in propositions. “Harmonious” OC embracing 3 factors is
Conceptual included in propositions.
Paper
Gupta et al. 1987 All 3 factors seen to contribute to high All 3 factors seen to contribute to high
integration between R&D and marketing. integration between R&D and marketing.
Gupta and 1988 Factors (1) and (3) positively correlated with “Harmonious” OC” (incorporating all 3
Wilemon integration (-measured as degree of R&D- factors) perceived to have strong positive
Marketing cooperation). impact on cooperation.
Factor (2) is subsumed within factor (1).
Gupta and 1991 The encouragement of teamwork, (2) and (3) 3% Marketing Directors pointed to the need to (2): Marketing Directors wished that R&D
Wilemon proposed as SM methods for improving hire R&D personnel who appreciate a would involve Marketing early.
intergroup relationship. “customer focus”.
Song and Parry 1993 Integration positively correlated with SM Integration positively correlated with “quality
value of integration (a multiple-item scale of relations” (– a measure incorporating above
incorporating above 3 factors). 3 factors).
Parry and Song 1993 Integration positively correlated with SM Integration positively correlated with Integration positively correlated with
“value” of integration (a multiple-item scale percentage of R&D staff with business “perceived quality” of relations.
incorporating factors 1 and 2 above); support background.
for “rewards” factors in “product development
stage” only.
Moenaert et al. 1994 Quality of “interfunctional climate” correlated
positively with interfunctional
communication. Climate includes trust/mutual
support.
Griffin and 1996 Includes (1) under “Organizational Structure” Includes “Personnel Movement” as integrating Refers to “harmonious operations”
Hauser and (3) under “Incentives and Rewards” as mechanism in conceptual framework. (incorporating above 3 factors) as an
Conceptual integrating mechanisms in conceptual organizational characteristic to enhance
Paper framework. cooperation.
Song et al. 1997 (1)/(3) impact positively on “cooperation”.

28
 Table 2
Theoretical and empirical evidence linking integration between marketing and other business functions
with new product success

Researcher(s) Sample Type of Firm Evidence

Lawrence and Lorsch 1967 6 organizations Chemical processing industry High performance related to
integration between Sales, R&D and
Production.
Souder 1980 38 firms Industrial Research Institute 66.7% of projects experiencing no
150 projects member firms interface problems became “complete
successes.”
Cooper 1984 122 firms Electronic, heavy equipment, Management strategies that balance
chemicals, materials marketing and R&D lead to new
product success.
Gupta et al. 1986 Conceptual paper Propose that the greater the gap
between the degree of integration
required and integration achieved the
lower the probability of innovation
success.
Souder 1988 56 firms Consumer and industrial The greater the harmony between
289 projects marketing and R&D, the greater the
likelihood of success.

Moenaert and Souder 1990 Literature Review Products and services Interfunctional integration positively
relates to innovation success.
Pinto and Pinto 1993 72 hospital project Health services Confirms the linkage between cross-
teams functional cooperation and the
299 team members successful introduction of new
programs and services.
Song and Parry 1993 264 firms; responses Japanese high-technology Confirms the link between R&D-
from marketing firms marketing integration and (1) new
managers product program success and (2)
successful new products.
Moenaert et al. 1994 40 Belgian firms Technologically innovative Significant correlation between
firms commercial success and (1)
interfunctional climate, (2) information
received by R&D.
Griffin and Hauser 1996 Conceptual paper Propose a link between integration
achieved and “Success Indicators”.
Song and Parry 1997 788 new product Japanese non-service Results suggest that cross-functional
projects companies integration has the largest total effect
404 firms on new product success.
Song et al. 1997 598 responses from Mexican high-technology R&D, marketing and manufacturing
original random companies groups all perceive a strong, positive
sample of 300 firms relationship between cross-functional
communication and new product
development performance.
Li and Calantone 1998 236 responses from US software industry Marketing-R&D interface found to
a sample of 969 have a positive impact on product
companies advantage.

29
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