In 2000 Peter Doyle started the abstract of his paper, Value-Based Marketing with the sentence. “Marketing has not had the impact on the boardroom that its importance justifies” (Doyle, 2000, page 299.) Doyle made a fair point.
Marketing’s Lack Of Influence
It is very common for academic marketers to bemoan marketing’s lack of influence. Many firms don’t even bother to have a Chief Marketing Officer (CMO). Some firms might have marketing so central to the common goal that everyone is a marketer. In which they genuinely might not need a CMO, I guess. Still, that seems unlikely in most organizations.
Doyle’s solution was to focus on how marketing delivers value for shareholders. His is a viewpoint unapologetically focused on a specific goal of marketing. He has very little patience for those who disagree. For example, Doyle says:
Other criteria for justifying marketing strategies include brand awareness, consumer attitudes, repeat buying and ratings of customer satisfaction. Unfortunately, many of these have weak relationships with sales and almost none to profitability.
Doyle 2000, page 300
Many would disagree with Doyle’s focus but at least he is relatively clear in what he thinks.
Value-Based Marketing: Targeting A Goal
Doyle’s piece has the great advantage of focusing on stating the goal of marketing to him. The problem with most marketing seems to be that it isn’t clear what the marketer is trying to achieve. If you explicitly state what you are trying to achieve then it makes it easier to measure whether you have succeeded in achieving it. Too many marketers have ill-formed goals that no one can possibly assess performance against. To be accountable you must have a goal against which to be accountable.
A further interesting point about Doyle’s piece is his use of Discounted Cash Flows (DCFs). They are pretty standard in MBA curriculum. It is good to see marketing academics employing a DCF.
Overall Doyle’s paper seems heavily influenced by Srivastava, Shervani, and Fahey’s work on market-based assets. It is a sensible and lucid discussion of the marketing/finance interface and worth a read.
For market-based assets see here.
Read: Peter Doyle (2000) Value-based Marketing, Journal of Strategic Marketing, 8, 299-311