WIZZ KIDS BUSINESS

Wizz Kids Business

Wizz Kids Business

Introduction

Managers face increasing pressure to boost marketing capability, especially during economic downturns. Although prior research has examined the impact of marketing capability on firm performance, there appears no published study that has investigated the importance of firm-idiosyncratic marketing capability for financial analysts. The analyses with a large scale longitudinal dataset support that higher marketing capability is related to stronger stock recommendations (higher levels and fewer downgrades) for the firm. Yet, this impact is nonlinear: too high marketing capability is sub-optimal and associated with weaker recommendations. In addition, marketing capability has a relatively larger impact in magnitude than financing capability. The result also indicates that the effects of marketing capability are more pronounced in the condition of high market competition. These findings innovatively reveal the dark side of both too low and too high marketing capability. The side-by-side comparison of marketing vs. financing capability also provides a new perspective for future research to examine issues related to marketing accountability. Therefore, all the issues related to Wizz Kids Business will be discussed in detail.

Business Problem

Prior research on competitive advantages has shown that market-based assets and customer knowledge play an important role for firms to survive and prosper in competitive environments. This study contributes to the theory development of RBV and MAF by marrying firm-idiosyncratic marketing capabilities to financial analyst metrics. This study does not agrees that marketing is concerned with the task of developing and managing market-based assets, but also adds that market-based assets such as marketing capability may have substantial effects on analysts' recommendation metrics. Because these metrics are much under-addressed in marketing and financial analysts are key stock market participants, this research helps justify the nomological validity of MAF and RBV and encourages future research utilizing such metrics to value marketing actions and customer behaviors (Anderson, 2004, 185).

Proposed Solution

The findings on the non-linear relationships between marketing capability and analyst recommendations suggest several interesting implications hidden in the literature. First, compared with too low level, higher marketing capability would cultivate market-sensing and customer-linking knowledge and, thus, benefit the firm with more promising future cash flows. As such, new dependent variables such as financial analysts' recommendations for the firm can provide novel perspectives in (1) explaining the critical importance of customer-centric skills in the competitive marketplace and (2) fostering a market oriented organization whose actions are consistent with implementation of the marketing concept as a business philosophy. Also, this research is among the first to reveal that too high level of marketing capability can backfire. That is, too high level of marketing capability may incur dark side effects (i.e., too much opacity or uncertainty, negative incremental effects, and sacrifices in customer relationship management) which would harm analysts' recommendations for the firm. Hence, this topic does not only shows the direct relevance of marketing capability for financial analysts, but also cautions against inappropriate strategic emphasis on too lean marketing budget, or relentlessly cutting firm promotional and selling ...