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Measurement of return on marketing investment: A conceptual framework and the future of marketing metrics

Published on Aug 1, 2007in Industrial Marketing Management 4.78
· DOI :10.1016/j.indmarman.2006.11.001
Steven H. Seggie10
Estimated H-index: 10
(Bilkent University),
Erin Cavusgil16
Estimated H-index: 16
(MSU: Michigan State University),
Steven E. Phelan14
Estimated H-index: 14
(UNLV: University of Nevada, Las Vegas)
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Abstract
There is growing recognition that firms in the contemporary business environment derive substantial and sustained competitive advantage from a bundle of intangible assets such as knowledge, networks and innovative capability. Measuring the return on such intangible assets has now become imperative for managers. The present manuscript focuses on the measurement of the return on marketing. We first discuss the conditions that make this task a high managerial priority. We then discuss measurement efforts to date, both in general management and marketing. We then offer a conceptual framework that places measurement efforts in a historical perspective. We conclude with a discussion on where the future of marketing metrics lies.
  • References (48)
  • Citations (83)
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References48
Newest
Published on Jan 1, 2009
Adam Brandenburger24
Estimated H-index: 24
,
Barry Nalebuff29
Estimated H-index: 29
Since 1922, "Harvard Business Review" has been a leading source of breakthrough management ideas - many of which still speak to and influence us today. "The Harvard Business Review Classics" series now offers readers the opportunity to make these seminal pieces a part of your permanent management library. Each highly readable volume contains a groundbreaking idea that continues to shape best practices and inspire countless managers around the world-and will have a direct impact on you today and ...
378 Citations
Published on Jan 1, 2008
Michael D Houle1
Estimated H-index: 1
Economic Value Added (EVA), when applied properly in a company, impacts all departments and decisions. The equation for EVA as well as the adjustments that must be made to current accounting practices is the basis for an understanding of EVA. The success of EVA is displayed as companies that have implemented EVA to varying degrees are compared with companies that have not implemented EVA. Once the argument for the overall superiority of EVA is made, traditional performance measures and current a...
74 Citations
Published on Apr 1, 2005in Journal of Brand Management
Rebekah Russell-Bennett21
Estimated H-index: 21
(UQ: University of Queensland),
Sharyn Rundle-Thiele22
Estimated H-index: 22
Name brands remain fundamental to consumer life in the Western world. Consumers may not be as loyal to one brand as were their ancestors, but they are loyal to brands. This paper proposes a brand loyalty life cycle and draws implications for marketers. The brand loyalty life cycle is thought to comprise five eras of brand loyalty: (1) the birth of brand loyalty, (2) the golden era of brand loyalty, (3) latent brand loyalty, (4) the birth of multi-brand loyalty, and (5) the final era of declining...
80 Citations Source Cite
Published on Jan 1, 2005in Harvard Business Review 5.69
Randy L. Stone1
Estimated H-index: 1
,
Kevin J. Clancy1
Estimated H-index: 1
23 Citations
Published on Jan 1, 2005in Journal of Marketing 7.82
Douglas W. Vorhies10
Estimated H-index: 10
(University of Mississippi),
Neil A. Morgan37
Estimated H-index: 37
(UNC: University of North Carolina at Chapel Hill)
Abstract Market-based organizational learning has been identified as an important source of sustainable competitive advantage. One particular learning mechanism, benchmarking, is a widely used management tool that has been recognized as appropriate for identifying and enhancing valuable marketing capabilities. However, despite widespread admonitions to managers, the benchmarking of marketing capabilities as a route to sustainable competitive advantage has received scant empirical attention. The ...
751 Citations Source Cite
Published on Oct 1, 2004in Journal of Marketing 7.82
Roland T. Rust55
Estimated H-index: 55
(UMD: University of Maryland, College Park),
Francis Chittenden35
Estimated H-index: 35
(LBS: London Business School)
+ 2 AuthorsRajendra K. Srivastava33
Estimated H-index: 33
(Emory University)
Abstract For too long, marketers have not been held accountable for showing how marketing expenditures add to shareholder value. As time has gone by, this lack of accountability has undermined marketers’ credibility, threatened the standing of the marketing function within the firm, and even threatened marketing’s existence as a distinct capability within the firm. This article proposes a broad framework for assessing marketing productivity, cataloging what is already known, and suggesting areas...
693 Citations Source Cite
Published on Apr 1, 2004in Journal of Marketing Management
Francis Chittenden35
Estimated H-index: 35
(LBS: London Business School),
Flora Kokkinaki12
Estimated H-index: 12
,
Stefano Puntoni12
Estimated H-index: 12
In recent years both practitioners and academics have shown an increasing interest in the assessment of marketing performance. This paper explores the metrics that firms select and some reasons for those choices. Our data are drawn from two UK studies. The first reports practitioner usage by the main metrics categories (consumer behaviour and intermediate, trade customer, competitor, accounting and innovativeness). The second considers which individual metrics are seen as the most important and ...
128 Citations Source Cite
Published on Jan 1, 2004in Journal of Marketing 7.82
Roland T. Rust55
Estimated H-index: 55
(UMD: University of Maryland, College Park),
Katherine N. Lemon28
Estimated H-index: 28
(BC: Boston College),
Valarie A. Zeithaml42
Estimated H-index: 42
(UNC: University of North Carolina at Chapel Hill)
The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm’s customer equity relative to the incremental expenditure necessary to produce the change. The change in the firm’s customer equity is the change in its current and future customers’ lifetime values, summed across all customers in the industry. Each customer’s lifetime value results from t...
1,324 Citations Source Cite
Published on Jan 1, 2004in Harvard Business Review 5.69
Roland T. Rust55
Estimated H-index: 55
,
Valarie A. Zeithaml42
Estimated H-index: 42
,
Katherine N. Lemon28
Estimated H-index: 28
Most executives today agree that their efforts should be focused on growing the lifetime value of their customers. Yet few companies have come to terms with the implications of that idea for their marketing management. Oldsmobile, for example, enjoyed outstanding brand equity with many customers through the 1980s. But as the century wore further on, the people who loved the Olds got downright old. So why did General Motors spend so many years and so much money trying to reposition and refurbish ...
129 Citations
Cited By83
Newest
Published on Dec 1, 2018in Industrial Marketing Management 4.78
Yiannis Kouropalatis3
Estimated H-index: 3
(Cardiff University),
Alessandro Giudici3
Estimated H-index: 3
(Lond: University of London),
Oguz Ali Acar4
Estimated H-index: 4
(Lond: University of London)
An extensive body of work investigates business phenomena from the capability perspective introduced by Teece, Pisano, and Shuen (1997). While several literature reviews on capabilities exist, research is still fragmented with ongoing debates between those trying to foster relevance and passionate critics in favour of rigour. This study contributes to the conversation by looking at how the community of scholars gathered around Industrial Marketing Management (IMM) has engaged with this body of w...
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Published on Sep 19, 2018in Administrative Sciences
Anatoli Colicev3
Estimated H-index: 3
,
Ashwin Malshe3
Estimated H-index: 3
,
Koen Pauwels30
Estimated H-index: 30
As customer-brand engagement progressively shifts to digital domains, understanding social media effects in branding has become a vital issue. Social media effectiveness is especially important for the US retail sector due to intense competition among retailers for consumer attention and engagement on digital channels. Yet, the research on the effectiveness of social media in the retail industry remains sparse. Thus, the purpose of this paper is to investigate how social media affects US retaile...
1 Citations Source Cite
Published on Mar 12, 2018in Industrial Management and Data Systems 3.73
Chunguang Bai4
Estimated H-index: 4
(University of Electronic Science and Technology of China),
Purvi Shah5
Estimated H-index: 5
(WPI: Worcester Polytechnic Institute)
+ 1 AuthorsJoseph Sarkis77
Estimated H-index: 77
(WPI: Worcester Polytechnic Institute)
Purpose The purpose of this paper is to identify how organizations can evaluate the green product deletion decision within an environmentally sustainable consumption and production environment through a hybrid multistage multiple criteria evaluation approach. Design/methodology/approach This paper proposes a decision-making model by integrating “soft computation” using neighborhood rough set theory, fuzzy cluster means, and cumulative prospect theory. Literature is used to identify various facto...
8 Citations Source Cite
Published on Nov 4, 2017in Future Internet
Jose Ramon Saura6
Estimated H-index: 6
,
Pedro Ramiro Palos Sánchez6
Estimated H-index: 6
,
Luis Suárez1
Estimated H-index: 1
In the practice of Digital Marketing (DM), Web Analytics (WA) and Key Performance Indicators (KPIs) can and should play an important role in marketing strategy formulation. It is the aim of this article to survey the various DM metrics to determine and address the following question: What are the most relevant metrics and KPIs that companies need to understand and manage in order to increase the effectiveness of their DM strategies? Therefore, to achieve these objectives, a Systematic Literature...
15 Citations Source Cite
Published on Jul 1, 2017in Environmental Science and Pollution Research 2.91
Syed Abdul Rehman Khan6
Estimated H-index: 6
(Chang'an University),
Dong Qianli5
Estimated H-index: 5
(Chang'an University)
This article investigates the impact of five determinants of the green supply chain practices on organizational performance in the context of Pakistan manufacturing firms. A sample of 218 firms was collected from the manufacturing industry. The green supply chain practices were measured through five independent variables including green manufacturing, green purchasing, green information systems, cooperation with customers, and eco-design. By using exploratory factor and simultaneous regression a...
19 Citations Source Cite
Published on Jun 4, 2017in Journal of Food Science 2.08
Abdullahi Auwal Gindi1
Estimated H-index: 1
,
A.M. Abdullah1
Estimated H-index: 1
+ 1 AuthorsNolila Mohd Nawi3
Estimated H-index: 3
1 Citations Source Cite
Published on Mar 1, 2017in Danube
František Milichovský2
Estimated H-index: 2
The effectiveness of marketing activities has become important, especially in the industrial environment. In an industrial environment, there is a prerequisite for the success of strategic marketing objectives in relation to corporate strategy. The main aim of the paper is to determine whether the realization of marketing activities is influenced by corporate size. For this reason, a questionnaire survey was used, focusing on engineering companies operating in the Czech Republic. To process the ...
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Published on Jan 1, 2017
Korey Rubenstein , Rouxelle de Villiers4
Estimated H-index: 4
Abstract Art Rey, a middle-aged general manager (GM) of a FastFood King franchise in a little town far, far away is something of a local legend. His store is renowned in the neighbourhood for its cleanliness, attention to detail and for providing friendly service – often by Art himself, who works tirelessly to ensure a ‘first class’ customer experience. Art has been awarded dozens of recognitions by FastFood King Corporation over three decades of employment, having started with the company as a ...
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Published on Jan 1, 2017
Sandra Streukens16
Estimated H-index: 16
(University of Hasselt),
Sara Leroi-Werelds5
Estimated H-index: 5
(University of Hasselt),
Kim Willems9
Estimated H-index: 9
(Vrije Universiteit Brussel)
Importance-performance map analysis (IPMA) combines PLS-SEM estimates, indicating the importance of an exogenous construct’s influence on another endogenous construct of interest, with an additional dimension comprising the exogenous construct’s performance in a two-dimensional map. From a practical point of view, IPMA contributes to more rigorous management decision-making. The basic principles of IPMA are well understood, yet the inter-construct relationships are typically modeled as being lin...
5 Citations Source Cite
Published on Sep 1, 2016in Electronic Commerce Research and Applications 2.91
Mahyar Sharif Vaghefi1
Estimated H-index: 1
(UWM: University of Wisconsin–Milwaukee),
Huimin Zhao1
Estimated H-index: 1
(UWM: University of Wisconsin–Milwaukee)
A framework for modeling on-line video views.A definition of "viral videos" based upon relative function performance and fitted function parameters.Analysis of video views with respect to video categories and time scale granularities.A means of analyzing on-line video channels.Applications to marketing decision support systems. It is estimated that the online video advertising market will be worth $8 billion by 2016, up from $4 billion by 2013. Consequently, there is a need for metrics to help a...
1 Citations Source Cite