Marketing for share price effect

Malcolm McDonald
Cranfield School of Management

Emeritus Professor Malcolm McDonald of Cranfield School of Management shows how marketing can demonstrate its contribution to shareholder value.

The most common financial objective of modern commercial corporations is the sustainable creation of shareholder value (SVA). This can be achieved only by providing shareholders with a total return from capital growth and dividend yield that exceeds their risk-adjusted required rate of return for this particular investment.

The failure of the marketing community to get to grips with shareholder value is the real reason so few companies have a marketing person on their board.

In today's highly competitive environment, the major sources of shareholder value creation are the intangible marketing assets of the business, such as brands, customer relationships and channels of distribution, the 80% of the company's value that does not appear on the traditional balance sheet.