Ask a Chief Marketing Officer about the challenges they confront in their organizations and the relationship with the CFO is frequently near the top of the list. The same conversation with the Chief Financial Officer usually includes frustration with marketing. Such tension is normal, and if managed well (hello, CEO) can by healthy and productive for the organization.
In an effort to bring more of the rigor and discipline of financial analysis to marketing decisions, a number of scholars and consulting organizations have attempted to apply financial investment models to the management of multiple products within the firm. After all, firms manage portfolios of products.
Most firms, and the managers who operate them, seek to grow. Indeed, a review of most CEO letters associated with annual reports, finds growth to be one of the two most frequently identified objectives (the other is cash flow). Growth, or at least well-managed, profitable growth, is important for many reasons. It makes the firm more valuable to shareholders. It makes the firm a more exciting place to work, which makes it easier to hire...
Many marketers seek to obtain financial benefits from their brands by using the awareness, attitudes, affection, and loyalty associated with these brands by “extending” the brand to new and different products and product categories. Procter and Gamble used its Tide brand, which was associated for many years with a single powdered detergent, to expand into an array of more than 60 related cleaning products, including specialty powdered products, liquid detergents, antibacterial fabric spray, and instant...
Two functions in the firm are customer-facing and responsible for revenue generation: sales and marketing. Despite this shared perspective and common objective, in many organizations, there is tension between the marketing organization and the sales organization. In some cases, this tension may be healthy, but in other cases it is dysfunctional. The role of senior management is to manage this tension and ensure that it works to the advantage of the firm. Managing this organizational...
