Linking Marketing to Shareholder Value in Listed and Non-Listed Markets

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Alpert, Frank

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In this thesis it is recognised that marketing has a dual role to satisfy both customer and shareholder objectives. The issue of shareholder value creation of marketing is an important and immediate agenda for marketing executives, management and academics. To date, marketers have not been able to adequately quantify and measure shareholder value creation through marketing assets and marketing expenditure. This has led to a dilution of marketing power and influence in the boardroom with management tending to treat marketing as discretionary expenditure and not as an asset. Academics have responded with conceptual models that relate marketing assets back to shareholder value, generally through cash flow or sales models. The creation of shareholder value through marketing assets and expenditure is then conceptualised and tested empirically. The conceptual model builds on the theory of agency and incomplete markets setting to illustrate the flow effects through marketing assets to shareholder value. The conceptual model also demonstrates that marketing expenditure can have stock and/or flow impacts on shareholder value. Flow effects are indirect effects that are mediated through sales, cash flows, and earnings and can be either temporary or longer term. It is concluded that in listed markets stock prices are the general surrogate for shareholder value, and risk adjusted earnings are the appropriate surrogate in non-listed markets. The thesis then empirically illustrates and tests the relationships between marketing communications expenditure on two data sets representing firms in listed and non-listed settings. The empirical results reveal that marketing expenditure does play an important role in the creation of shareholder value and that stock and flow effects are both present. Knowledge of the various empirical impacts from marketing across firm size, industry and listed and non-listed market settings observed in this thesis should prove highly valuable for marketers and managers. Finally, a conceptual understanding by marketers of the financial metrics that are required to be influenced in order to increase shareholder equity will provide greater clout in negotiations with management and boards of directors.

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Thesis (PhD Doctorate)

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Doctor of Philosophy (PhD)


School of Marketing

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marketing assets

marketing expenditure

listed markets

non-listed markets


shareholder value creation

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