Marketing as an Investment in Shareholder Value

Hughes, M.; Hughes, P.; Yan, J.; Sousa, C.M.P.

doi:10.1111/1467-8551.12284

Marketing as an Investment in Shareholder Value

Hughes, M.; Hughes, P.; Yan, J.; Sousa, C.M.P.

Authors

M. Hughes

P. Hughes

Professor Karena Yan ji.yan@durham.ac.uk
Professor

C.M.P. Sousa

Abstract

We present resource‐based and capability‐based arguments of marketing investment intensity to offer a strategic view of marketing as an investment in shareholder value. We find that marketing investment intensity has a U‐shaped quadratic effect on shareholder value creation (Tobin's q) that calls for marketing investment to be protected and increased, not surrendered. We show how marketing investments interact with investments in R&D, human capital and operations to reveal how strategic co‐investments can alter the shareholder value of marketing. Finally, we show how competitive intensity and failings in the firm's investment productivity (its ability to convert investment expenditure into sales) point to malaise in the firm's own strategic architecture as a fault for perceived poor returns from marketing investments. Our findings suggest that marketing investment should not be scapegoated when its contributions to shareholder value are not as expected. When invested in strategically and in combination with other investments, marketing can unlock exciting improvements in shareholder value.

Citation

Hughes, M., Hughes, P., Yan, J., & Sousa, C. (2019). Marketing as an Investment in Shareholder Value. British Journal of Management, 30(4), 943-965. https://doi.org/10.1111/1467-8551.12284

Journal Article Type	Article
Acceptance Date	Dec 21, 2017
Online Publication Date	Jan 25, 2018
Publication Date	Oct 31, 2019
Deposit Date	Jan 3, 2018
Publicly Available Date	Jan 25, 2020
Journal	British Journal of Management
Print ISSN	1045-3172
Electronic ISSN	1467-8551
Publisher	Wiley
Peer Reviewed	Peer Reviewed
Volume	30
Issue	4
Pages	943-965
DOI	https://doi.org/10.1111/1467-8551.12284
Public URL	https://durham-repository.worktribe.com/output/1341777

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Copyright Statement
This is the accepted version of the following article: Hughes, M., Hughes, P., Yan, J. & Sousa, C.M.P. (2019). Marketing as an Investment in Shareholder Value. British Journal of Management 30(4): 943-965, which has been published in final form at https://doi.org/10.1111/1467-8551.12284. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.