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Marketing Excellence: Nature, Measurement, and Investor Valuations

Marketing Excellence: Nature, Measurement, and Investor Valuations

Christian Homburg, Marcus Theel and Sebastian Hohenberg

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Interest in marketing excellence is growing rapidly, but its nature and effects are unclear. This research reveals that marketing excellence is a strategy focused on achieving organic growth by executing three priorities: marketing ecosystem, end-user, and marketing agility. Moreover, findings show that investors value marketing excellence more highly than they value strategies based on market orientation and marketing capabilities. Results provide a new marketing playbook to help companies better achieve their growth targets in today’s quickly changing environment.

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Related Marketing Courses: ​
Principles, Core, and Intro to Marketing Mgmt; Marketing Strategy; Business-to-Business Marketing​​​​ ​​​​

Full Citation: ​
Homburg, Christian, Marcus Theel, and Sebastian Hohenberg (2020), “Marketing Excellence: Nature, Measurement, and Investor Valuations,”  Journal of Marketing 84, no. 4 (July 2020): 1–22.

Article Abstract
Marketing excellence is a foundational principle for the discipline that is gaining increasing attention among managers and investors. Despite this, the nature of marketing excellence and its effectiveness remain unclear. This research offers insight by addressing two questions: (1) How do managers understand and exercise marketing excellence? and (2) How do investors evaluate marketing excellence? Study 1 merges insights from 39 in-depth interviews with senior executives and secondary data from 150 firm strategies to find that marketing excellence is a strategy type focused on achieving organic growth by executing priorities related to the marketing ecosystem, end-user, and marketing agility. Study 2 quantifies the impact of marketing excellence on firm value by using a machine learning algorithm and text analysis through an original dictionary to classify the text from 8,317 letters to shareholders in 1,727 U.S. firm annual reports. Calendar-time portfolio models reveal abnormal one-year returns of up to 8.58% for marketing excellence—returns that outpace those associated with market orientation and marketing capabilities. Findings offer guidance to managers, educators, and investors regarding how marketing excellence manifests—paving the way for the allocation of firm resources to ensure that marketing drives organic growth.

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Special thanks to Kelley Gullo and Holly Howe, Ph.D. candidates at Duke University, for their support in working with authors on submissions to this program.

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Christian Homburg is Professor of Business Administration and Marketing and Chairman, Department of Marketing & Sales, University of Mannheim, Germany; and 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.