Empirical testing of Kotler's high-performance factors to increase sales growth

Oren Dayan,Cecil A Arnolds,Miemie Struwig

doi:10.4102/ac.v10i1.128

Abstract

Purpose and/or objectives: The primary objective of this study is to empirically test Kotler's (2003) high-performance model which ensures an increase in sales growth. More specifically, the study explores the influence of process variables (as measured by marketing strategies), resources management (as measured by the management of labour, materials, machines, information technology and energy) and organisational variables (as measured by TQM and organisational culture) on sales growth in the food, motorcar and high-technology manufacturing industries. Problem investigated Various research studies suggest that the managers of firms are continuously challenged in their attempts to increase their sales (Morre, 2007; Pauwels, Silva Risso, Srinivasan & Hanssens, 2004: 142-143; Gray & Hayes, 2007: 1). Kotler (2003) suggests a model that leads to a high performing business. The question is posed as to whether this model can be used to increase sales growth in all businesses. This study seeks to develop a generic model to increase sales growth across industries by using an adapted version of Kotler's (2003) high-performance model. The study investigates the application of this adapted model on the food, motorcar and high-technology manufacturing industries. Design and/or methodology and/or approach: An empirical causal research design that includes 770 marketing and product development practitioners from multinational food, motorcar and high-technology manufacturing firms, was used in this study. A response rate of 76.1% was achieved as only 571 useable questionnaires were returned. The internal reliability and discriminant validity of the measuring instrument were assessed by the calculation of Cronbach alpha coefficients and the conducting an exploratory factor analysis respectively. Structural Equation Modelling SEM) was used to statistically test the relationships between the independent variables (marketing strategies, resource management, TQM and organisational culture) and the dependent variable (sales growth). Findings and/or implications: As the achievement of increased sales, profits and market share is important to all industries, companies spend large amounts of money on research and development to increase sales and market share. The study's empirical results lead to a proposed model that shows the factors influencing sales growth. These factors include distribution channel development, third-party agreements, e-business, e-savings and a market-oriented organisational culture.

Highlights

The success of any business is generally associated with achieving its triple bottom line and business goals as well as increasing its market share
The final factor necessary to achieve high performance is the nature of the organisation, which includes the firm‟s structures, policies and organisational culture (Seiler & Gurewitsch, 2005; Kotler, 2003)
The study asserts that the variables included are well-known management concepts, but that the relationships between these variables have not been tested at a rigorous statistical level such as structural equation modelling

Summary

Introduction

The success of any business is generally associated with achieving its triple bottom line and business goals (such as profitability, return on investment and the maximisation of shareholders‟ wealth) as well as increasing its market share. Sales growth is defined in this study as the perceived extent to which a firm achieves sales targets, increases market share and generates sales of products with long-term profitability. A high-performance business, according to Kotler (2003: 63), is one that creates customer value and customer satisfaction through the effective management of four key factors, namely, stakeholders, processes, resources and organisation (See Figure 1). Organisational culture, among others, has been identified as a key factor influencing a manager's efficacy, organisational commitment, customer loyalty, customer satisfaction and increased sales (Torvald, Svein & Einar, 2005: 31)

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Methods

Results