Developing Marketing Capabilities Using Networks: Structure, Content, and Performance Implications

Abstract

Building on marketing capabilities literature and social network theories, this thesis empirically investigates the contribution of network connections to the development of firm marketing capabilities. This thesis conceptualizes network relationships based on the cohesion and diversity of network resources in the firm-firm network and firm-government network. Using a survey and archival data obtained from 186 firms operating in the Ethiopian Commodity Exchange, this study reveals how external network partners contribute to developing firms' marketing capabilities. I found that diversity in firm–firm and firm–government networks produced comparable results, but cohesion in these two networks produce different results. The findings indicated that diversity in both firm-firm and firm-government networks contributed to marketing capabilities. While cohesion in firm-firm networks contributes to marketing capabilities, the same is not true for firm-government network cohesion and marketing capabilities relationship. Besides, the effect of network connections on marketing capabilities is contingent upon environmental dynamism and knowledge tacitness. Cohesive networks contribute to the development of marketing capabilities under a high level of knowledge tacitness. Diverse networks provide knowledge relevant to building marketing capabilities in dynamic environments. The findings also revealed that marketing capabilities mediate the effect of the firm–firm network on sales growth and new market development. This research provides new insights for marketing researchers and managers on how to make the most out of their network connections to develop marketing capabilities and how investments in developing marketing capabilities contribute to firm performance.