Salesperson competitive intelligence and performance: The role of product knowledge and sales force automation usage
Introduction
“By the word intelligence we mean all the information we have about the enemy and his country, that is, the basis for our own plans and actions. If we consider for a moment the nature of this information, how unreliable and variable it is, we soon get a feel for how dangerous the edifice of war is and how easily it can collapse, burying us under its rubble.”
Carl von Clausewitz (1852), Prussian General, Vom Kriege [On war].
“Now the reason the enlightened prince and the wise general conquer the enemy whenever they move, and their achievements surpass those of ordinary men, is foreknowledge”.
Sun Tzu (1963), The art of war.
In competitive markets, groups of value-creating organizations coexist “in a state of vigorous and creative tension with one another, each contributing to economic progress in different ways” (Ghoshal et al., 2000). In these markets, salespersons are often the ultimate conveyers of each organization's value proposition. The vigorous tension among competitors requires salespersons to make sense of various forms and sources of knowledge in order to successfully meet their customers' and their organizations' demands. However, mere attainment of knowledge is not enough. Left unused, it is merely a stockpile of intellectual capital. A salesperson must continually and capably utilize the sum of competitive knowledge available to them to turn those stocks of intellectual capital into a competitive advantage (Nahapiet and Ghoshal, 1998, Spender, 1996, Subramaniam and Youndt, 2005).
Rapp et al. (2011) refer to salesperson competitive intelligence as “individual-level knowledge about competitors and the competitive environment, that can be used tactically to aid in enhancing salesperson performance”. In this paper, we focus on the competitive intelligence behaviors of salespersons, and conceptualize salesperson competitive intelligence behaviors (SCIB) as the salesperson's gathering, organization, and utilization of competitive intelligence. Practitioners and academic researchers tend to agree that SCIBs can greatly enhance organizational-level competitive intelligence efforts (e.g., Glitman, 2007, Le Bon and Merunka, 2006, Liu and Comer, 2007), yet we know relatively little about how SCIBs influence individual-level performance (Rapp et al., 2011).
While research is scant on the role of SCIB on salesperson performance, several studies examine salespersons' behaviors and influences related gathering and disseminating competitive intelligence for their organizations (Le Bon and Merunka, 2006, Le Meunier-FitzHugh and Piercy, 2006, Pass et al., 2004). For example, research explores how salespersons influence firm performance by coordinating information with marketing (Homburg et al., 2008), coping with diverse social environments (Verbeke et al., 2008), adapting sales processes (Franke and Park, 2006, Weitz et al., 1986), and making sense of diverse cognitive and emotional cues (Giacobbe et al., 2006). In this research, we extend extant research on salesperson competitive intelligence behaviors by investigating individual-level drivers and outcomes of SCIB. In doing so, we explain the process by which salespersons constantly update their understanding about their competitive environment to avoid becoming obsolete (Jones et al., 2004).
We draw on the cognitive selling paradigm (e.g., Porter and Inks, 2000, Sujan et al., 1994, Weitz et al., 1986) to develop a knowledge–behavior–performance framework for understanding SCIB and its role in salesperson performance. Moreover, we recognize that organizations increasingly invest in sales force automation (SFA) systems to integrate various knowledge reservoirs and enhance sales force performance (Ahearne et al., 2008, Honeycutt, 2005, Speier and Venkatesh, 2002); thereby, we theorize and empirically test the influence of SFA use on the knowledge–behavior–performance framework. Essentially, individual-level knowledge (such as product knowledge) and organizational-level knowledge (which can be accessed through SFA systems) are specific forms of intellectual capital (Nahapiet and Ghoshal, 1998, Spender, 1996, Subramaniam and Youndt, 2005). Accordingly, we investigate whether SFA use enhances or attenuates the influence that individual-level product knowledge has on SCIB and salesperson performance.
We proceed, first, with brief reviews of the literature related to competitive intelligence and SFA use. Then, we present our model comprising relationships among salesperson product knowledge, SCIB, and salesperson performance and discuss the potential moderating effects of salesperson SFA use. Following this, we explain our methodology and present the results of our study of a business-to-business sales force operating in the medical devices industry. Then, we discuss our results and present both theoretical and managerial implications. Finally, we present the limitations of our research and opportunities for future research.
Section snippets
Competitive intelligence
In general, competitive intelligence (CI) includes information collected on many actors and situations relevant to a competitive landscape, such as information about competitors, customers, suppliers, and relevant technologies (Dishman & Calof, 2008). Competitive intelligence behaviors refer to how persons or organizations gather, organize, and utilize this information (Kahaner, 1997). At an organizational level, CI behaviors represent a spectrum of activities pertaining to making sense of the
Research model and hypotheses
The cognitive selling paradigm theorizes that a salesperson's knowledge impacts his information-based capabilities and behaviors, and these influence his performance (Porter and Inks, 2000, Sujan et al., 1994, Weitz et al., 1986). This paradigm informs our use of a knowledge–behavior–performance framework in our model of SCIB. Following Homburg et al. (2008), we define salesperson product knowledge as the extent to which a salesperson is knowledgeable about the technical features and
Research design and data collection
We tested our model using data collected from a large U.S.-based medical devices company in the biotechnology industry. The sample for this study was drawn from field sales representatives who were in charge of selling drug infusion systems to various clients such as hospitals, managed care facilities, and oncology clinics. Our data collection setting provides a rich context for testing our SFA adoption model. First, the focal firm had recently implemented a mobile SFA system. The new SFA
Analysis and results
As a preliminary analysis, we went over the descriptive statistics to examine the distribution and normality of the data (please see Table 1). The descriptive shows that there is a large enough variation in our constructs for our analysis to be meaningful. Normal Q–Q plots also indicate that our data is reasonably normally distributed. A reasonably straight line demonstrates a normal distribution. Since we have reasonably large samples (200 + cases), skewness and kurtosis will not make a
Discussion
This research strengthens our emerging understanding and appreciation of individual-level competitive intelligence behaviors (Rapp et al., 2011), and complements the growing organizational-level research on competitive intelligence (Jaworski et al., 2002). We propose a model to conceptualizes and empirically test the role that SCIBs play in determining salesperson performance. Specifically, we develop an integrated moderated mediation model which clarifies how salesperson knowledge, SCIB, and
Theoretical and managerial implications
This research adds to our theoretical understanding of the salesperson CI and SFA adoption in influencing salesperson performance and has important implications for these areas of literature. Based on our review of extant literature, this is the first known attempt to theoretically and empirically investigate the role of CI behavior in the performance of boundary-spanning personnel. As theorized, our results support the expectation that SCIB plays a critical role in translating salesperson
Limitations & future research directions
Our study is by no means exhaustive and has limitations. In particular, the lack of objective salesperson financial performance data limits us to use perceptual performance measures. We did not have access to individual sales figures because the use of such data was precluded by firms' policies in most cases. Similarly, though we would have preferred to use a tangible and objective measure of SFA adoption and use, lack of such data in most of the firms compelled us to use the self-report
Babu John Mariadoss is an Associate Professor at the Department of Marketing and International Business at Washington State University. His primary research interests focus on various aspects of Marketing Strategy theory and practice, specifically (i) sales strategy, (ii) B2B relationships and (iii) branding strategy. His research has been published in the Journal of Marketing Research, Journal of the Academy of Marketing Science, Marketing Letters, Journal of International Marketing,
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Cited by (0)
Babu John Mariadoss is an Associate Professor at the Department of Marketing and International Business at Washington State University. His primary research interests focus on various aspects of Marketing Strategy theory and practice, specifically (i) sales strategy, (ii) B2B relationships and (iii) branding strategy. His research has been published in the Journal of Marketing Research, Journal of the Academy of Marketing Science, Marketing Letters, Journal of International Marketing, Industrial Marketing Management, and Journal of Personal Selling and Sales Management.
Chad Milewicz is an Assistant Professor of Marketing in the Romain College of Business at the University of Southern Indiana. His focal areas of research are marketing strategy and professional selling.
Sangwon Lee is an Assistant Professor of Marketing in the Miller College of Business at Ball State University. He had several years of advertising industry experience as a global account manager. His research interests include design and innovation, brand naming, advertising message development, country of origin and sales strategy.
Arvin Sahaym's research examines the impact of capabilities, contingences and technologies on firm performance. His research is motivated by real-world phenomena at the interface of strategy, information systems and entrepreneurship. His research has been published in a number of journals including Strategic Management Journal, Organization Science, MIS Quarterly, Journal of Business Venturing, and Journal of Business Research.