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Book part
Publication date: 27 September 2021

Neil Thomas Bendle, Jonathan Knowles and Moeen Naseer Butt

Marketers frequently lament the lack of representation of marketing in the boardroom and the short tenure of CMOs. The most common explanations offered are that marketing

Abstract

Marketers frequently lament the lack of representation of marketing in the boardroom and the short tenure of CMOs. The most common explanations offered are that marketing is not perceived as a strategic discipline and that marketers do not demonstrate a strong enough understanding of how the business makes money.

Financial accounting is how “score is kept” in terms of business performance. It is, therefore, in the self-interest of marketers to become familiar with financial reporting. Doing so will allow them to understand how marketing activities are recorded. In addition, academic researchers need to understand the meaning of the financial measures that they often use as the metrics of success when researching marketing strategy questions.

This is especially important since financial reporting generally does not recognize assets created by marketing investments. In order to substantiate a claim that “brands are assets”, marketers must be able to explain how the financial accounting rules misrepresent economic reality and why managers might use a different set of principles for management reporting.

We argue that the misrepresentation of market-based assets has two forms of negative impact for marketers: external and internal. The external problems are that financial statements are not especially informative about the value of marketing for the providers of capital and do not provide a true portrait of the economic resource base of the company. The internal problems are that marketers cannot point to valuable assets that they are creating, nor can they be effectively held accountable for the way that these assets are managed given that the assets are not recorded.

We do not expect immediate radical changes in financial reporting because financial accounting rules are designed with the specific interests of the suppliers of capital (debt and equity) in mind. To influence financial accounting developments, such as encouraging greater disclosure of marketing activity in the notes to the published accounts, marketers must be able to communicate in language understood by accountants and the current users of financial accounts. To aid this we provide guidance for marketers on the purpose and practices of accounting. We also discuss how academic marketing researchers might wish to adjust financial accounting data to capitalize a proportion of marketing expenses for companies where marketing is a primary driver of business performance.

Details

Marketing Accountability for Marketing and Non-marketing Outcomes
Type: Book
ISBN: 978-1-83867-563-9

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Article
Publication date: 1 January 1986

T.F. Barrett

Discusses intangible marketing assets and the difficulties of the valuation of these. Considers the problem of definition of intangible marketing assets and tries to…

Abstract

Discusses intangible marketing assets and the difficulties of the valuation of these. Considers the problem of definition of intangible marketing assets and tries to clarify this. States the Accounting Principles Board (USA) as possessing the characteristic ‘identifiability’ and by the Accounting Standards Committee (UK and Ireland) as ‘separability’ and by others as controllability. However, within this article quantifies intangible marketing assets as ‘all non‐separable assets which yield a full advantage in the output markets of competitive organization’. Further looks at the historic costing and modernist accounting thought. Concludes by stating that the exclusion of marketing intangible assets from the accounting valuation process does, however, pose consequential dangers, which are itemized and discussed.

Details

European Journal of Marketing, vol. 20 no. 1
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 17 October 2016

Frans Prenkert

The purpose of this paper is to provide an account of who forms what market assets by making what market investments in a business network.

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Abstract

Purpose

The purpose of this paper is to provide an account of who forms what market assets by making what market investments in a business network.

Design/methodology/approach

To investigate what market investments were made by certain actors into resource interfaces as market assets, the author draws on a case network based on an investigation of the Chilean salmon production network. To this end, the author chose the fish – being the focal object resource in that network – as a point of departure. The author systematically investigates the resource interfaces that this resource has with three other specific resources: feed, fishmeal, and vaccines in a thick case study.

Findings

This study shows that market investments entail committing resources to resource interfaces which turns them into market assets. Resource interfaces as market assets have implications on how we characterize and value resource interfaces. Multilateral resource interfaces become valuable to firms as a result of continuous market investments made into them. This produces different types of resource interfaces, some of which are of mediatory character bridging between distant resources in a network.

Research limitations/implications

This study focuses on the market investments being made to create and sustain market assets. Of course such assets are linked to a firm’s internal assets which this study do not investigate. In addition, this study emphasizes the commitment of resources into existing resource interfaces, the ensuing creation of market assets, and its use and value for firms and downplays a firm’s need to account for market investments and the market investments required to create a new resource interface.

Practical implications

As resource interfaces are valuable market assets, it is important to understand the functioning of different types of resource interfaces so as to exploit their potential as efficient as possible. This paper shows that some resources act as bridging resources connecting the borders of two indirectly related resources. Controlling bridging resources becomes an essential task for managers in business networks.

Social implications

Understanding the market investments into resource interfaces enables firms to become more skilled in organizing and controlling networks. These networks can play important roles in the economic development of society and create improved societal conditions for people, organizations, and economies.

Originality/value

By combining a market investment and market asset conceptualization of investments in networks with a resource interaction approach, this paper provides an enhanced understanding of resource interfaces as market assets. Theoretical implications for our understanding of resource interfaces – its value and character – are discussed.

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Article
Publication date: 26 January 2010

Mamoun N. Akroush and Samer M. Al‐Mohammad

Appreciating the limited empirical research in the knowledge management (KM) field, the purpose of this paper is to investigate the relationship between marketing

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2836

Abstract

Purpose

Appreciating the limited empirical research in the knowledge management (KM) field, the purpose of this paper is to investigate the relationship between marketing knowledge management (MKM) and performance in Jordanian telecommunications organizations (JTOs).

Design/methodology/approach

A quantitative methodology is adopted in which a model is developed, and hypotheses are stated, in order to examine the proposed relationship between MKM assets and capabilities and JTOs' performance. A highly structured questionnaire is developed and distributed to a sample of 339 managers in JTOs. With a response rate of 92 percent, 312 questionnaires are returned; the number of valid and usable questionnaires is 292. Using exploratory and confirmatory factor analyses, MKM assets are classified into built‐ and invested‐in marketing assets, while MKM capabilities are classified into internal and external marketing capabilities. Furthermore, JTOs' performance is classified into three dimensions: market, customer, and financial performances. Structural equation modeling is utilised to test the stated hypotheses and model.

Findings

Empirical findings indicate that MKM assets and capabilities have a positive effect on the overall performance of JTOs, with all its dimensions. Built‐in marketing assets show the strongest influence on market performance, internal marketing capabilities show the strongest influence on customer performance, while external marketing capabilities show the strongest influence on financial performance. On the other hand and despite showing the least influence on financial and market performances, invested‐in marketing assets have maintained a positive relationship with all dimensions of JTOs' performance.

Practical implications

A holistic approach should be adopted when addressing MKM. MKM assets and capabilities should be applied collectively in a competitive manner that reflects on organizational performance. This requires constant consideration of available marketing assets and capabilities, with continuous investments in developing and acquiring marketing assets. While financial measures are generally used in assessing KM contribution, other non‐traditional measures should be applied in order to give a more realistic and holistic view of MKM contribution to organizational performance.

Originality/value

Focusing on MKM assets and capabilities, the paper introduces a new perspective of MKM in Jordan, as a developing country. While focusing on a special scope of KM, i.e. MKM, the paper provides further empirical support to the relationship between KM and organizations' multiple dimensions of performance. The fact that this is the first empirical study conducted in Jordan where KM research is relatively scarce, adds to its originality.

Details

International Journal of Emerging Markets, vol. 5 no. 1
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 1 January 1986

Richard M.S. Wilson

Suggests that most managers (other than those in marketing) take the view that too much money is spent on marketing. Adumbrates that the accountant may be able to…

Abstract

Suggests that most managers (other than those in marketing) take the view that too much money is spent on marketing. Adumbrates that the accountant may be able to contribute to improved decision making in marketing with regard to expenditure as an investment outlay rather than current expenses. Stresses, herein, that the concern for accounting is with marketing assets and their intangibility. Discusses further assets, valuation and investment and portrays these with the aid of tables and figures. Sums up by saying that a strong case can be made for recognizing many examples of marketing outlay as investments in assets rather than current operating expenses, showing new light on attitudes towards marketing decision‐making and financial reporting.

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European Journal of Marketing, vol. 20 no. 1
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 March 2003

Jan Mouritsen

This paper argues that intellectual capital and intangible assets are difficult resources for two different reasons. First, intellectual capital and intangibles assets are…

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3954

Abstract

This paper argues that intellectual capital and intangible assets are difficult resources for two different reasons. First, intellectual capital and intangibles assets are not (yet) disentangled by the institutions of the capital markets, and therefore they are not (yet) translatable with any degree of confidence into predictions about stock price behaviour. Second, intellectual capital and intangibles are not absent from capital market intelligence; they are just typically translated into financial form, when they are presented to actors in the capital markets, even if in forms that are themselves “invisible”. The capital market may have limited understanding of intellectual capital, but it is also always seeking to understand the complexity of business and (im)possible futures. Its appreciation of intellectual capital is therefore fragile.

Details

Accounting, Auditing & Accountability Journal, vol. 16 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 27 July 2010

Norhana Salamudin, Ridzwan Bakar, Muhd Kamil Ibrahim and Faridah Haji Hassan

This study examines the intangible assets value of the Malaysian market. It measures the relationship between intangible assets and corporate market value of Malaysian…

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4514

Abstract

Purpose

This study examines the intangible assets value of the Malaysian market. It measures the relationship between intangible assets and corporate market value of Malaysian firms and whether they are consistent with findings in other advanced markets.

Design/methodology/approach

Firstly, the development of intangible assets of Malaysian companies over 2000 to 2006 were measured statistically using Landsman's balance sheet identity model. Then, cross‐sectional multi‐regression procedure was used to ascertain the relationship between intangible assets and financial performance.

Findings

The findings reveal that the Malaysian market developed intangible assets at a rather slow pace, with significant development from year 2004 onwards. It also reveals that the book value of net assets (BVNA) are still dominant in Malaysian corporate valuation but this trend is declining as greater interest has now been developed in employing intangible assets and earnings as important variables. Furthermore, the results indicate that there is a positive trend in intangible assets development in Malaysia, consistent with those of advanced markets such as the US, Europe and Australia. However, the Malaysian market lags by about 20 years as compared to the more advanced ones.

Research limitations/implications

The limitations of this paper are as follows: the time frame for this study was seven years and it looked at the post‐financial crisis period. A longer time frame may be desirable covering both pre‐ and post‐crisis periods. Secondly, this study did not look into intangible assets at the micro‐level perspective. Unless solid definition, classification, measurement and valuation of intangible assets have been ascertained, it is not worth dwelling on individual assets, such as brand, research and development (R&D), and human capital.

Originality/value

The main contribution of this study is that it provides empirical evidence that intangible assets or intellectual assets are strategic assets that require close attention in line with development of the knowledge‐based economy.

Details

Journal of Intellectual Capital, vol. 11 no. 3
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 29 June 2021

Emre Çelik and Kerem Yavuz Arslanli

This paper aims to determine the specific financial ratio's effects on market value and return of assets for Turkish real estate investment trusts (REITs) traded at…

Abstract

Purpose

This paper aims to determine the specific financial ratio's effects on market value and return of assets for Turkish real estate investment trusts (REITs) traded at Istanbul Stock Exchange (ISE). The paper intends to define liquidity ratios, financial structure ratios, return ratios and stock performance ratios related to market value and return of asset.

Design/methodology/approach

The study includes 17 REITs traded in ISE. The period of study is specified as the year from 2009 to 2018. Panel data analysis is applied in this study. Dependent variables are current market value and return of assets, independent variables are 12 financial ratios, which are considered to explain the model significantly. These ratios will be calculated from audited year-end balance sheets for specific periods throughout at least ten years as time series. Two different models and hypotheses have been established to identify the financial ratios that affect the market value and return of assets for REITs.

Findings

According to the results, long-term financial loans/total assets, return of equity and working capital ratio are negatively correlated with market value, while market value/book value and total assets are correlated positively. On the other hand, market value/book value ratio, price/earning ratio, long-term financial loans/total assets and earnings per share are correlated with return of assets. REITs have high levels of financial leverage, especially in foreign currency. The striking point is that REITs hardly ever do not use financial derivatives to hedge their position again currency and interest rate risk. This approach makes the financial structures of REITs vulnerable and fragile against market volatility.

Originality/value

In Turkey, as an example of an emerging market, financial borrowing does not increase the return rates and market value for REITs due to market's idiosyncratic properties. This finding provides substantial insight into how the debt and equity allocation of Turkish REITs should be structured. Also, it has been observed that forward-looking expectations are considered more than the current situation in the market.

Details

Journal of European Real Estate Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-9269

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Book part
Publication date: 11 November 2014

Tatiana Albanez and Gerlando Augusto Sampaio Franco de Lima

According to the market timing theory, firms try to take advantage of windows of opportunity to raise capital by exploiting temporary cost fluctuations of alternative…

Abstract

Purpose

According to the market timing theory, firms try to take advantage of windows of opportunity to raise capital by exploiting temporary cost fluctuations of alternative financing sources. In this context, the main objective of this paper is to examine the influence and persistence of market timing in the financing decisions of Brazilian firms that launched IPOs in the period from 2001 to 2011.

Methodology/approach

We analyze the influence of past market values on the capital structure of these firms, based on the main models proposed by Baker and Wurgler (2002), adapted to reflect the characteristics of Brazilian firms’ financial statements.

Findings

We find evidence of market timing, but this behavior is not sufficiently persistent in the period studied to the point of determining these firms’ capital structure. We believe the fact that Brazilian companies rarely carried out follow-on primary equity issues after floating their capital in the period analyzed, due to the presence of more advantageous financing sources (particularly from the national development bank, BNDES), explains the results. Therefore, Brazilian firms appear to be pay heed to different funding sources, in search of windows of opportunity, to guide their financing decisions and determine their capital structures.

Originality/value

The Brazilian capital market has been developing intensely in recent years, making it increasingly relevant to analyze the financing and investment decisions of the country’s listed companies. The Brazilian literature on capital structure is extensive, but few works have addressed the issue of market timing.

Details

Emerging Market Firms in the Global Economy
Type: Book
ISBN: 978-1-78441-066-7

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Book part
Publication date: 30 May 2013

Alain Verbeke and Jenny Hillemann

We discuss Professor Jean-François Hennart’s key contributions to international strategic management theory, with a special focus on his integrative, 2009 Journal of…

Abstract

We discuss Professor Jean-François Hennart’s key contributions to international strategic management theory, with a special focus on his integrative, 2009 Journal of International Business Studies article, ‘Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets’. In Hennart’s (2009) model, complementary assets co-determine the MNE’s initial entry mode choice and the subsequent evolution of the MNE foreign operations’ governance. Hennart (2009) describes this perspective on MNE governance as one based on asset bundling. We focus on the paper’s conceptual insights and discuss how Hennart’s model of foreign market entry informs managerial practice in the realm of international strategy.

Details

Philosophy of Science and Meta-Knowledge in International Business and Management
Type: Book
ISBN: 978-1-78190-713-9

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