MARKETING AND FIRM VALUE Metrics, Methods, Findings, and Future Directions

The marketing profession is being challenged to assess and communicate the value created by its actions on shareholder value. These demands create a need to translate marketing resource allocations and their performance consequences into financial and firm value effects. The objective of this paper is to integrate the existing knowledge on the impact of marketing on firm value. The authors first frame the important research questions on marketing and firm value and review the important investor response metrics and relevant analytical models, as they relate to marketing. The authors next summarize the empirical findings to date on how marketing creates shareholder value, including the impact of brand equity, customer equity, customer satisfaction, R&D, product quality and specific marketing-mix actions. In addition the authors review emerging findings on biases in investor response to marketing actions. The paper concludes by formulating an agenda for future research challenges in this emerging area.