Marketing Performance Measurement Ability and Firm Performance

Abstract

Marketing practitioners are under increasing pressure to demonstrate their contribution to firm performance. It has been widely argued that an inability to account for marketing's contribution has undermined its standing within the firm. To respond to this pressure, marketers are investing in the development of performance measurement abilities, but to date, there have been no empirical studies of whether the ability to measure marketing performance has any actual effect on either firm performance or marketing's stature. In this study of senior marketing managers in high-technology firms, the authors examine the effect of ability to measure marketing performance on firm performance, using both primary data collected from senior marketers and secondary data on firm profitability and stock returns. They also explore the effect of ability to measure marketing on marketing's stature within the firm, which is operationalized as chief executive officer satisfaction with marketing. The empirical results indicate that the ability to measure marketing performance has a significant impact on firm performance, profitability, stock returns, and marketing's stature within the firm.