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Marketing Excellence: How It’s Measured, Who Values It

Marketing Excellence: How It's Measured, Who Values It

Christian Homburg, Marcus Theel and Sebastian Hohenberg

Marketing excellence is gaining increasing attention among managers and investors. Despite this, the nature of marketing excellence and its effectiveness remain unclear. A new Journal of Marketing article offers insight in this area by addressing two questions: How do managers understand and exercise marketing excellence? and how do investors evaluate marketing excellence?

In the first study, our research team conducted 39 in-depth interviews with senior managers of global companies and augmented the data with secondary data on 150 firm strategies, applying the theories-in-use methodology. Findings reveal that marketing excellence is a strategy focused on achieving organic growth by executing three priorities: marketing ecosystem, end-user, and marketing agility. The marketing ecosystem priority is a firm’s strategic means of growing the business by developing mutually beneficial networks in the proximal and distal firm environment. The end-user priority promotes engaging with the final customers who apply or consume the firm’s offering and leveraging the final customer insights for growing the business. Finally, the marketing agility priority facilitates the execution of growth activities by the marketing organization and its members through simplified structures and processes, fast decision making, and trial and error learning. By delineating the components of marketing excellence, this study advances the field’s understanding of what marketing excellence is. These advancements are of substantive value because they guide managers about where they can invest in marketing excellence and how to communicate marketing excellence to internal and external stakeholders.


The second study quantifies the impact of marketing excellence on firm value, which refers to investors’ expectations of future cash flows, and then compares these effects with the effects of current marketing strategy concepts. We choose firm value as the central outcome variable because it is a comprehensive and accurate measure for evaluating the impact of marketing strategy concepts. Using 8,317 letters to shareholders from 1,727 annual reports between 1998 and 2016, we measured marketing excellence with a machine learning algorithm and an original dictionary and then assessed the impact of marketing excellence on firm value. Results are similar across the two marketing excellence measures: The machine learning algorithm (4.80%) and the original dictionary (8.58%) had one-year abnormal returns significantly higher than benchmark portfolios. These performance metrics are even higher in the period from 2014 to 2017 where the marketing excellence portfolio achieved average annual returns of 16.82%, significantly outstripping market orientation and marketing capabilities portfolios (1.95% and 8.53% respectively). These results show that investors value marketing excellence more highly than they value strategies based on market orientation and marketing capabilities.

In addition to contributing to marketing academia, study results have important implications for managers and educators. First, we recommend that managers use the results to coordinate and communicate marketing excellence. For instance, the findings offer guidance for developing marketing excellence checklists and key performance indicators. Second, we recommend that educators use the findings to explain to future managers the strategic role of marketing in driving firms’ organic growth. In addition, we recommend that educators develop new courses that align firms’ decision fields for growth in terms of the marketing ecosystem, end user, and marketing agility. The findings of this research provide educators with direction on the content and scope of such courses. 

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From: Christian Homburg, Marcus Theel, and Sebastian Hohenberg, “Marketing Excellence: Nature, Measurement, and Investor Valuations,” Journal of Marketing.

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Christian Homburg is Professor of Business Administration and Marketing, University of Mannheim, Germany, and Distinguished Professorial Fellow, University of Manchester, UK.

Marcus Theel is a doctoral candidate, Marketing Department, University of Mannheim, Germany.

Sebastian Hohenberg is Assistant Professor of Marketing, McCombs School of Business, University of Texas at Austin.