Handbook of Marketing and Finance

Handbook of Marketing and Finance

Elgar original reference

Edited by Shankar Ganesan

Many organizations have found that the value to business operations and financial performance created by the marketing function has become very important. The need to demonstrate this importance has also become clear. Top managers are constantly challenging marketers to document marketing’s contribution to the bottom-line and link marketing investments and assets to metrics that matter to them. This Handbook relates marketing actions to various types of risk and return metrics that are typically used in the domain of finance. It provides current knowledge of this marketing-finance interface in a single, authoritative volume and brings together new cutting-edge research by established marketing scholars on a range of topics in the area.

Chapter 9: The Marketing–Finance Interface: An Organizational Perspective

Peter C. Verhoef and Joost M.E. Pennings

Subjects: business and management, marketing, economics and finance, financial economics and regulation

Extract

Peter C. Verhoef and Joost M.E. Pennings INTRODUCTION Within the marketing literature there is an increasing debate on the declining role of marketing. Webster et al. (2005) specifically discuss the decline and also dispersion of marketing, where dispersion means that nowadays everyone is responsible for marketing. Nath and Mahajan (2008, p. 65) maintain ‘that over the past three decades marketing academics have raised their concern with marketing’s decreasing influence at the level of corporate strategy.’ They also state that the roles of the general managers, chief financial officers (CFOs) and ‘other penny pinchers and number crunchers’ have become more important than the role of chief marketing officers (CMOs). Recently, Verhoef and Leeflang (2009) investigated this declining role and showed that marketing has become mainly responsible for advertising, promotions, relationship marketing initiatives, and customer satisfaction measurement. Distribution and pricing have become the responsibility of other departments, such as sales and finance. Their findings seem to confirm that marketing is now mainly involved with tactical decisions (Sheth and Sisodia, 2005), where in fact they are only responsible for a limited set of these decisions, mainly focusing on advertising and customer relationship building. One of the crucial problems mentioned in these discussions is the assumed weak link between marketing and finance and the lack of contribution of marketing to firm performance. In this respect some statements are rather blunt. For example, McGovern and colleagues (2004, p. 70) argue that ‘misguided marketing strategies have destroyed more shareholder value, and probably more careers, than shoddy...

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