We suggest that the effectiveness of marketinginitiatives should be evaluated on the basis of their impacton the basic drivers of shareholder value–cash flow acceleration,cash flow enhancement, reduction in volatility and vulnerabilityof cash flows, and growth in the long-term value of business).These shareholder value metrics provide a framework for communicationof the contribution of marketing strategies to value creation.In particular, this paper focuses on the role of marketing inenhancing shareholder value by reducing the vulnerability andvolatility associated with cash flows

Rajendra K. Srivastava

2002

Scholarcy highlights

  • Marketing professionals have historically found it difficultto measure and communicate to other disciplines and to top managementthe value created by marketing activities
  • Justificationof marketing and communication initiatives is restricted to theirimpact on revenue generation
  • Marketing actions do lead to an acceleration ofthe market's acceptance of new products, to enhanced customerretention/loyalty, to an improvement in the size and qualityof customer bases, to price premiums and other desirable payoffs.Such financial outcomes suggest that marketing activities areoften strategic investments, not tactical, intangible expenses
  • We suggest that the effectiveness of marketinginitiatives should be evaluated on the basis of their impacton the basic drivers of shareholder value–cash flow acceleration,cash flow enhancement, reduction in volatility and vulnerabilityof cash flows, and growth in the long-term value of business).These shareholder value metrics provide a framework for communicationof the contribution of marketing strategies to value creation.In particular, this paper focuses on the role of marketing inenhancing shareholder value by reducing the vulnerability andvolatility associated with cash flows
  • This riskreduction role of marketingactivities is examined within cross-functional processes forcreating customer value such as design of new products and services,supply chain management and management of relationships withcustomers, channels and strategic partners

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