Fusion for Profit: How Marketing and Finance Can Work Together to Create Value

Fusion for Profit: How Marketing and Finance Can Work Together to Create Value

Fusion for Profit: How Marketing and Finance Can Work Together to Create Value

Fusion for Profit: How Marketing and Finance Can Work Together to Create Value

Synopsis

The corporate world is typically structured in silos. Managers urgently need to overcome this "silo" effect by fusing ideas across different functional areas in the firm. In Fusion for Profit, Sharan Jagpal, a well-known and highly respected multidisciplinary researcher and business consultant, explains in simple language using real-world examples how managers can use sophisticated concepts to fuse different functional areas in the firm, especially marketing and finance, to increase the firm's value. The author provides novel solutions to a wide range of complex business problems ranging from choosing pricing and bundling strategies, to positioning and messaging strategies, to measuring brand equity, to measuring advertising productivity in a mixed media plan including Internet advertising, to compensating a multiproduct sales force, to measuring the potential gains and risks from mergers and acquisitions. These concepts are illustrated using case studies from a variety of firms in different industries, including AT&T, Coca-Cola, Continental Airlines, General Electric, Home Depot, Southwest Airlines, and Verizon.

Excerpt

Business is ideally about serving customers well while delivering good value to shareholders. But like many ideals, when it comes to cases in the real world, the actual service a customer receives is often encumbered by the invisible boundaries that separate different business functions such as marketing and finance.

These impediments to customer service result from confining marketing and finance in “silos” that operate separately and often act independently. In addition to the main divide between them, each of these core business functions also has its own set of internal boundaries. Within marketing, for example, for years there has been a traditional line between brand advertising and direct marketing. Comparable lines within finance divide supply and distribution. However, across both marketing and finance, the rapid and continuous changes in information systems and customer control are quickly making all such boundaries disappear.

More than 30 years ago, strategy guru Peter Drucker recognized that the purpose of business is to create a customer. Based on that goal, he said, “The business enterprise has two—and only two—basic functions: marketing and innovation.” Throughout my years in both the manufacturing and services sectors, I have tried to let this profound observation guide me in making resource allocation decisions and developing performance measurements. In my experience, senior executives in every industry and segment are looking for ways to increase measurability of their marketing campaigns . . .

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