Market-Based Management and Financial Performance Chapter Sixteen M arket-Based Management, 4th edition.

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Presentation transcript:

Market-Based Management and Financial Performance Chapter Sixteen M arket-Based Management, 4th edition

16-2 Market-Based Management and Financial Performance Chapter Sixteen –Market-Based Management, Financial Performance, and Shareholder Value –Customers and Shareholder Value –Customer-Focused Strategies and Shareholder Value

16-3 How to Overwhelm Customers and Shareholders How to Overwhelm Customers and Shareholders

16-4 Customer Satisfaction and Shareholder Value

16-5 Marketing Strategies and Profitability How are market- based net profits derived?

16-6 Customer-Focused Marketing Strategies and Profitability Customer Volume Strategies 1.Attract new customers to grow market share 2.Grow the market demand by bringing more customers into the market 3.Enter new markets to create new sources of customer volume How is Customer Volume Calculated? How do Customer Volume Strategies affect Total Contribution, Net Marketing Contribution, and Profit?

16-7 Customer-Focused Marketing Strategies and Profitability Customer Margin Strategies 1.Grow revenue per customer by product-line extensions or by adding services 2.Increase margin per customer with improved value- adding products and services 3.Lower variable sales and transaction costs 4.Eliminate undesirable customers How is Customer Margin Calculated? How do Customer Volume Strategies affect Total Contribution, Net Marketing Contribution, and Profit?

16-8 Marketing Strategies and Assets How do Marketing Strategies affect assets? 1.Accounts Receivable 2.Investment in Inventory 3.Investment in Fixed Assets

16-9 Return Measures of Profitability How does Net Marketing Contribution affect Net Profits? –Return on Sales (ROS) Net Profit/Sales –Return on Assets (ROA) Net Profit/Assets –Return on Equity (ROE) Net Profit/Equity

16-10 Measures of Shareholder Value How does Market-Based Management affect Shareholder Value? –Earnings per share (EPS) –Price Earnings Ratio (PE) –Economic Profit (EP)

16-11 Market-Based Management and Shareholder Value

16-12 Takeaways / Review Customer Satisfaction and Shareholder Value Market-Based Management and Shareholder Value Customer-Focused Marketing Strategies and effects on profits, assets, and shareholder value

16-13 Marketing Performance Tools Marketing Profitability and Financial Performance Marketing Profitability Metrics Marketing ROS 18% Marketing ROI 122% NMC per Share $3.48