Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value

Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value

Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value

Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value


A seminal work - reformulating marketing around creating shareholder value.

For the first time, marketing is integrated with the governing objective of management. A practical, step-by-step guide to developing marketing strategies that generate growth and shareholder value. An essential text for top management and MBAs.

Marketing has not had the impact on management that its importance merits. This is largely due to its unclear objectives and weak intellectual foundations.

Value Based Marketing reformulates marketing, making its goals more relevant and establishing it on a sounder intellectual basis. The governing objective of management in all of today's leading companies is to maximise long-term returns to shareholders. The book redefines marketing's role as contributing to this task of shareholder value creation. It explores how this affects marketing planning and decisions about brands, pricing, communications, distribution and the Internet.

The increasing emphasis placed on the financial technique of shareholder value as a means for measuring a company's performance has provided a major opportunity for marketing managers: the ability to increase greatly their sphere of influence in setting their company's strategic direction like never before. The book provides a clear practical introduction to shareholder value analysis and provides practical tools for translating marketing ideas into the financial framework used by modern boards of directors.

For top management and CFOs, the book explains how marketing generates shareholder value. It shows how top management should evaluate strategies and stimulate more effective and relevant marketing in their companies.


This book is aimed at senior management – marketing, finance, operations managers, and indeed all those with responsibility for the economic performance of their businesses. It is also intended for use on advanced marketing courses on MBA and similar level management programmes.


The goals of the book are ambitious – they are no less than to redefine the purpose of marketing and how its contribution should be measured. The result of this redefinition will be a concept of marketing that is more practical and more relevant to the objectives of today's top management. Specifically, I argue that the purpose of marketing is to contribute to maximising shareholder value and that marketing strategies must be evaluated in terms of how much value they create for investors. This new concept, which I call value-based marketing, does not overthrow the existing body of marketing knowledge. On the contrary, it makes it more relevant and practical by giving it greater clarity and focus.

Many senior managers have noticed a paradox in how firms perceive marketing. On the one hand, every chief executive and mission statement puts marketing at the very top of the agenda. Getting closer to customers and meeting their needs is seen as the cornerstone of building a world-class company. A market orientation is regarded as the essential coordinating focus for all the disciplines and processes of the business. At the same time, marketing professionals, marketing departments and marketing education are not highly regarded. Few chief executives are from a marketing background, most companies do not have a marketing director on the board, and marketing qualifications are often not treated seriously. One leading consulting firm called marketing departments 'a millstone around an organisation's neck'.

What accounts for this paradox of marketing being paramount but market professionals being disregarded? The main problem is that the marketing discipline has never been clear what its objectives are. Most strategy proposals emanating from marketing staff justify investments in advertising or marketing, in terms of increasing consumer awareness, sales volume or market share. But most boards of directors are sceptical that such measures have any clear relation to the firm's long-run profitability. Marketing managers rarely see the necessity of linking marketing spending to the financial value of the business. Given today's enormous pressures on top managers to generate higher returns to shareholders, it is hardly surprising that the voice of marketing gets disregarded. The situation will never be resolved until marketing professionals learn to justify marketing strategies in relevant financial terms.

If managers can show that marketing will increase returns to shareholders, marketing will obtain a much more preeminent role in the board rooms of industry. The discipline itself will also obtain more respect for its greater rigour and direction. The purpose of this book is to demonstrate how marketing creates value for shareholders and to provide managers with the practical tools for developing and evaluating marketing strategies using modern shareholder value analysis.

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