In November, assistant professors of marketing Sundar Bharadwaj and Anil Menon were honored for their article "Determinants of Success in Service Industries: A PIMS-Based Empirical Investigation." Their collaboration won the 1993 Best Paper Award from the Journal of Services Marketing. Menon was a professor at Texas Polytechnic University in Lubbock Texas when they co-authored the article, but came to Emory as a professor this month.
This award came only one month after Bharadwaj was given the Best Services Article Award from the Services Special Interest Group of the American Marketing Associa-tion for his research paper "Sustainable Competitive Ad-vantage in Service Industries: A Conceptual Model and Research Propositions," published in the Journal of Marketing. He wrote the paper with P. Rajan Varadarajan of Texas A&M University and John Fahy of Trinity College, University of Dublin.
It was Bharadwaj and Menon's objective to "develop research propositions delineating the relationship between key strategic and competitive factors and their effect on service firm performance." They also empirically tested their hypotheses and proposed "directions for managerial practice and future research in the area of strategic marketing of service firms."
In the article, the professors explain that the area of strategic services marketing is a new field, and while studies have been conducted regarding some of its aspects, such as store choice location, market potential and competitive behavior, there have been "no systematic integrated studies of these strategic variables." Their study was conducted to "provide initial insights into this sparsely researched area."
Bharadwaj and Menon address the factors that influence the performance of service firms and propose hypotheses related to organization, marketing and competitive factors. These three categories are analyzed more specifically in terms of their respective components: organization is examined in terms of forward and backward integration, service quality, image and shared customers; marketing includes expenditures for advertising, promotions and sales force, relative price, product line breadth and customization; and competitive factors are order of entry, relative market share and number of competitors.
The authors also discuss three indicators of corporate strength and security, financial performance, market performance and risk level, in terms of the original variables. The researchers form several hypotheses regarding the correlation between the variables and the indicators.
Many of Menon and Bharadwaj's hypotheses fit conventional wisdom, such as their assertion that, "The market performance of a service firm should be inversely related to its order of entry," or the earlier a firm is open for business, the greater its share of customers and the higher its performance. They also predicted that there should be a negative relationship between the market share of a service firm and its number of competitors. While the first of these hypotheses was disproved by their research (company image and shared customers both have a high correlation to market performance, while order of entry actually has a negative one), the second was shown to be correct.
Bharadwaj and Menon's study serves an exploratory role regarding the nature of service firm performance. In their study, they combined the consumer and industrial services, and they state that in the future, "Studies that separate not only these two sectors, but also do not assume that the service sector is homogeneous, are needed."