Marketing Performance

1. Does marketing matter?

Does marketing matter? I know that the answer to

this question would certainly differ if the respondent

headed up a firm's marketing department or

the finance department. One of my Executive MBA

students (a finance person, naturally!) recently

asked, ''How can I know, I mean really know, that

a dollar spent on marketing is going to pay off?'' At

first, I gave a flip reply: ''How do you know, really

know, that a dollar spent on human resources is

going to pay off?'' Snark may be satisfying, but it

is not enlightening, and the student was quite serious

in this inquiry. To explore further, I asked the

class to discuss the issue in light of their own experiences.

The impact of marketing on firm performance

was unclear to many and dismissed by some;

suffice it to say, I did not go home that night feeling

affirmed as a marketer. Having played out repeatedly

in my head over the past several months, it is

fortuitous that recently there has been a wealth of

research in the marketing literature to address this

fundamental question.

In the introduction to a special issue of Journal of

Marketing titled ''Linking Marketing to Financial

Performance and Firm Value,'' editor Don Lehmann

(2004) said that if marketing wants ''a seat at the

table'' in important business decisions, it must be

able to demonstrate that marketing actions affect

financial outcomes. Since this special issue was first

published, it seems as if marketing researchers

have---to borrow a theme from the 2008 presidential

election---been reaching across the aisle to their

colleagues in finance to say ''Yes, marketing does

matter.'' The extreme stock market volatility of

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