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3.3 Marketing Assets and Capabilities
A significant proportion of the market value of firms today is based on
intangible assets and capabilities that are shaped by the marketing function
such as brands, customer and supplier relationships (Wu, 2010). From the
resource based point of view, the internal firm assets and capabilities are
keys to firm competitiveness. Such inside out looking of a firm has the basic
assumption that the external environments are similar in most cases for
firms in the same industry. And what makes one firm profitable and the
other confusing and staggering is the availability of these resources and
more importantly the utilization of these resources. Similarly, Wu (2010)
suggest that assets and capabilities enable firms to execute their
organizational processes effectively.
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Hence, it can be generalized that the firms ‗resources and capabilities are
both enabler and driver of their competitiveness in the markets. Hunt and
Morgan (2012) further propose that comparative advantage in tangible and
intangible resources result in competitive advantage to the firm, which, in
turn, contributes to higher firm value.
The marketing assets and capabilities are jointly addressed in many
literatures as their distinctions become blurred in some cases and unclear
in other cases. However, in this study their basic differences and their
relations are attempted to be scrutinized. Thus, marketing assets are
conceptualized as the resources endowments the business has accumulated
for factor costs and managerial support. In connection to this, Day (1994a)
argues that marketing assets encompasses investments in the scale, scope,
and efficiency of facilities and systems brand equity and the consequences
of the location activities. On the other hand, capabilities are the glue that
brings these assets together and enables them to be deployed
advantageously (Day, 1994a) and they can also be hard for management to
identify. Therefore, the basic difference between the marketing assets and
capabilities is the inimitability, intangibility, and non-tradability of
capabilities which instead is deeply embedded in the organizational routines
(Agic et al., 2016; Grant, 1991).
Literatures claim that less attention has been paid to the capabilities by
which firms deploy their marketing strategies. In reality, capabilities may be
viewed at different levels in the firm, many of which cross different
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functional areas (Eisenhardt & Martin, 2000). However, capabilities relating
to market resource deployment are usually associated with the marketing
function (Danneels, 2008). In both cases, capabilities approach locate the
sources of a definable competitive position in the distinctive, hard to
duplicate resources the firm has developed (Wu, 2010; Boynton & Victor,
1991).
Thus, the integration of marketing assets and capabilities is the challenge of
modern managers in the globe because those resources which are made up
by the combination of assets and capabilities are cultivated slowly which
sometimes limit the ability of the firm to adapt to change (Ferreira &
Azevedo, 2008). Hence, management‘s task in the dynamic market is to
determine how best to improve and exploit these firm specific resources
(Hilda, Hope, and Ijeamaka, 2016). Such an argument may lead to the
conclusion that to the extent managements are optimally integrating these
firms‘ specific resources, their businesses become competitive and relevant
in the market. And failure to do so lead to stuck in the middle where neither
the competitiveness nor the future to stay in the market becomes certain.
By the same token, the strategic importance of capabilities lies in their
demonstrable contribution to sustainable competitive advantage and
superior profitability (Hilda et al., 2016; Day, 1994). However, in times of
turbulence the challenge of developing new capabilities comes to the force
(Barney, 1991). Thus, in time of turbulence the utilization of capabilities
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becomes challenging and necessity at the same time due to the applicability
of those capabilities for adapting environmental changes by firms (Boynton
& Victor, 1991). Figure 8 below shows the different types of capabilities.
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