Free until: 01 February 2023
The academic discipline of finance has been linked with the field of marketing, an enterprise referred to as “research on the marketing-finance interface.” It investigates the relationships between marketing-related variables and metrics of the behavior of financial-market participants, including analysts, investors, and creditors. Fundamental questions include: Do investors (and, therefore, the stock market) react when companies build brands, launch new products and engage in marketing activities that may not yield immediate cash-flow benefits, but strengthen the long-term viability of the enterprise? Conversely, are managers influenced by investor behavior? A firm’s stock price is a recognized consensus metric of its economic health and, as such, marketers are well served by knowing which of their actions, if any, either lift or depress stock prices.
This monograph integrates research in marketing, finance, and accounting into an overarching marketing–finance research framework. The timing is right for this monograph for several reasons. First, the number of empirical articles in major journals has grown to almost 300, with managers and researchers being confronted with an array of metrics, methods, and findings. Second, there has been a broadening of the metrics analyzed on both the marketing and the firm value side. Last, but not least, there is a growing trend in redefining the role of the corporation from maximizing shareholder value to providing value to several stakeholders, and the next-generation consumers will increasingly act on the notion that the primary purpose of a business is not to generate profits, but to improve society.
Marketing and Firm Value presents a conceptual framework and procedure to synthesize the marketing-finance literature. The authors identify marketing-finance metrics and methods used. For researchers, it provides an overview of metrics, methods, and findings and a practical roadmap for how to conduct marketing-finance research including an agenda for future research. For marketing executives, the monograph provides insights on the strongest drivers of firm value. Further it provides an understanding of the potential of marketing to reconcile the objectives of at least two stakeholders (customers and shareholders) and possibly more (employees and communities). For the investor community, it offers insights on how to incorporate information from various marketing signals in their investment decisions and shows how marketing-based valuation methods can be used to evaluate entire businesses.