46
Institute for Market-based Management BrandIndex Meets Wall Street Wenn Bullen und Bären zu Markenfans werden Fachsymposium 2010 30. September 2010 YouGovPsychonomics AG, Köln Sascha Raithel e-mail: [email protected]

BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

  • Upload
    donhi

  • View
    213

  • Download
    0

Embed Size (px)

Citation preview

Page 1: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

Institute for Market-based Management

BrandIndex Meets Wall StreetWenn Bullen und Bären zu Markenfans werden

Fachsymposium 201030. September 2010YouGovPsychonomics AG, Köln

Sascha Raithele-mail: [email protected]

Page 2: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

Institute for Market-based Management

Institute for Market-based ManagementKaulbachstraße 4580539 MünchenTel.: +49 89 2180-5639Fax: +49 89 2180-5651E-mail: [email protected]: www.imm.bwl.lmu.de

BrandIndex Meets Wall StreetWenn Bullen und Bären zu Markenfans werdenFachsymposium 201030. September 2010YouGovPsychonomics AG, Köln

Sascha Raithel

Page 3: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

2

Agenda

1. Why marketing and finance?

2. How does marketing influence investors?

3. Is there empirical evidence?

4. So what?

Page 4: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

3

Agenda

1. Why marketing and finance?

2. How does marketing influence investors?

3. Is there empirical evidence?

4. So what?

Page 5: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

4

A company‘s market value can hardly be derived from tangible assets

HDAX (1980-2008)**

48%71% 70%

37%

52%29% 30%

63%

0%

25%

50%

75%

100%

1980s 1990s 2000s* 2008 Financial

Crisis

S&P 500 (1980-2002)

20%45%

85% 75%

80%55%

15% 25%

0%

25%

50%

75%

100%

1980 1990 2000 Dotcom Bubble's

Peak

2002 Post Crash

Sources: Ballow/Burgman/Roos/Molnar: “A New Paradigm for Managing Shareholder Value, July 2004, p. 7Lev: Intangibles: Management, Measurement, and Reporting,” Brookings Institution Press, 2001Lev: Remarks on the Measurement, Valuation, and Reporting of Intangible Assets. Economic Policy Review, Sept. 2003

* 2000-2007 ** HDAX contains stocks of 110 largest, publicly listed corporations in Germany (DAX, MDAX, TecDAX)

Book valueIntangible assets

Page 6: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

5

• Many intangible assets promising sustainable competitive advantage are driven by marketing: brand equity, customer satisfaction, and customer loyalty,

• Note: About 50% of variance in stock prices cannot be explained by traditional finance/accounting models.

Why should marketing care about intangible assets?

“Analysts know intangible assets exist Analysts are just skeptical that marketing has anything to do with creating those intangible assets.”(Leigh McAlister , Professor for Effective Business Leadership, 2008)

Page 7: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

6

CEOs & CFOs pressurize marketing to prove its accountability

“The lack of accountability has undermined marketers’ credibility, threatened the standing of the marketing function within the firm, and even threatened marketing’s existence as a distinct capability within the firm.”(Rust, Ambler, Carpenter, Kumar, & Srivastava, 2004)

because marketing is seen “to be slippery and expensive.”(Malcolm McDonald, Professor of Marketing, chairman of six companies, and member of operating boards of some multinational corporations, 2009)

Page 8: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

7

One firm – two languages

Marketing silo Finance silo

Brand awareness

CustomerloyaltyCustomer

satisfaction Financial performance Shareholder

value

Return on investment

Page 9: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

8

How can marketing earn a seat at the CxO-level table?

An outcomethat matters:

Benefits

Benefits

Provide evidence

Page 10: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

9

Mission statement

This research does not aim at “share branding” and creating a second IR division but rather aims for understanding how marketing

• does influence investors and analysts.

• can link its outcomes to the creation of shareholder value.

• can communicate its performance to more finance oriented stakeholder groups.

• can bring forward further arguments that may strengthen its position within the firm.

Page 11: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

10

Agenda

1. Why marketing and finance? Because it is relevant.

2. How does marketing influence investors?

3. Is there empirical evidence?

4. So what?

Page 12: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

11

The chain of marketing productivity: The role of investors

Investorcommunity

Investors form expectations about future cash-flows

Firm actions(Product strategy, advertising, )

Customer impact(Mindset metrics)

Market impact(Sales,...)

Financial impact(ROI, Cash flows, )

Firm value(Market capitalization)

Information

flow

Page 13: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

12

How does marketing influence investors and stock prices?

Page 14: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

13

Signaling effects

Strong brands reduce the perceivedrisk and signal „quality stocks“.

• Marketing related events are signals for the firm’s financial well-being, management expertise, and management’s plans.

• Events are• product prelaunch advertising campaigns • a new advertising slogan • a new celebrity endorsement contract • awards•

• Additionally, fund managers may believe to reduce their taken risk of alienating their clients if they hold “familiar”, “visible”, and “quality” stocks.

Page 15: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

14

Spillover effects

Marketers do influence investors similarly to consumers and do not only promote the company’s products but also do (unintentionally) promote its

stocks.

• Trading behavior of investors is systematically biased by many well-documented psychological phenomena.

• Investors behave similarly to consumers (e.g., advertising may simply increase awareness for a firm).

• A considerable number of investors are private households: At least some investor groups make investment decisions based on their experiences as consumers.

Page 16: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

15

Agenda

1. Why marketing and finance? Because it is relevant.

2. How does marketing influence investors? Signaling and spillover.

3. Is there empirical evidence?

4. So what?

Page 17: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

16

Providing empirical evidence is not trivial

• Many traditional marketing measurements do not allow any inferring as to whether the achievements fulfill the equity holders expectations and hence create shareholder value.

• Beyond that, it is important to understand how marketing outcomes can be transformed into metrics containing information relevant to financial markets and showing incremental value relevance.

• Marketing outcomes are predominantly of non-financial nature and have very often long-term effects while investors are not so experienced in evaluating the long-term financial value implications of marketing.

Page 18: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

17

Research differentiates two effects

• The immediate effect:Since marketing actions drive sales and profits, information about changes in important marketing metrics (satisfaction, loyalty, ) should correlate directly with stock returns (efficient market hypothesis).

• The mispricing effect:Investors underestimate the long-term financial performance effects of current marketing actions but will correct their initial misjudgment.

t-1 t = 0 t+1

t-1 t = 0 t+1

ʊ�Marketing metricʊ�Stock price

Page 19: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

18

Mispricing effect: Reputation champions as outperformers

50

75

100

125

150

175

200

Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10

Top 25% Reputation DAX

Corporate reputation data:Source: IMM Corporate Reputation Monitor©9 waves analyzed: 2005-12, 2006-06, 2006-12, 2007-06, 2007-12, 2008-06, 2008-12, 2009-06, 2009-12Sample size ranges between 26 to 28 DAX firmsDuring each wave a representative sample of the German general public was surveyed

Stock market data: Source: Datastream

Period: 30/12/2005 – 31/3/2010Dividends included

Weighting schemes: DAX stocks are weighted by market value; reputation portfolio stocks are weighted equally(Note: similar results for market value weighting)

156

114

Risk: EDAX = 1.01 (daily basis)

Price index (basis = 100)

0

30

60Difference in index points

Source: IMM research

Page 20: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

19

Advertising budget reallocation: Immediate market value effects?

Investorresponse

Advertising expenditures

TV

Radio

Newspaper

Cinema

Outdoor

Magazines

Internet (display)

Page 21: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

20

.110**

.134**

n.s.

n.s.

-.121**

n.s.

.139***

-.20 -.15 -.10 -.05 .00 .05 .10 .15 .20

Newspaper

Magazine

TV

Radio

Internet (display)

Cinema

Outdoor

Elasticity of abnormal stock return [multiplied by 10²]

The differential impact of advertising media on investors (analysis on a monthly level)

n.s. not significant * p < .10 ** p < .05 *** p < .01 (one-tailed test)Note:The simulation considers only estimated coefficients with |t-value| > 1 in the underlying econometric model. This figure reports abnormal stock returns in percentage of a permanent increase by 1% in one of the focal variables. A permanent increase by 1% of, for instance, newspaper advertising has a total impact of .110 • 10-2 percent on the abnormal stock return.Source: IMM research Database

Application scenario

Page 22: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

21

Further questions

• How sensitive are investors to marketing information compared to “traditional” information like financial reports?

• How immediate are immediate effects (yearly, monthly, weekly, )?

• Which marketing metrics (satisfaction, loyalty, ) have more value relevance?

• How can marketing managers measure their actions’ impact on market value?

Page 23: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

22

Do investors listen closely to the voices of consumers?

“Like investing itself, it seems that expert opinion has also become democratized [T]he growing importance of real HFRQRP\�GDWDʊconsumer opinions on which products and services they will spend their hard-HDUQHG�GROODU�RQʊLV�VWDUWLQJ�to be recognized by investment professionals. Used as a new, complimentary research tool, it is at least as powerful, if not more so than traditional data.”

(Marc Lepere, CEO of Vox Pop Investing, 2009)

Page 24: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

23

Conceptual framework

Stock Return

Buzz(voice of the consumer)

Media coverage

Advertising

Investors‘ expectations about future cash flows

Communication

Page 25: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

24

.47%**

n.s.

.81%**

n.s.

-1.68%**

-1.02%***

.33%*

-3% -2% -1% 1% 2%

Advertising

Positive Buzz

Positive functional media coverage

Positive social media coverage

Negative Buzz

Negative functional media coverage

Negative social media coverage

Effects of Media coverage, buzz, and advertising on weekly abnormal stock returns in the finance sector

n.s. not significant * p < .10 ** p < .05 *** p < .01 (one-tailed test)Note:The simulation considers only estimated coefficients with |t-value| > 1 in the underlying econometric model. This figure reports total effects of a permanent increase by one standard deviation in one of the focal variables. A permanent increase by one standard deviation of, for instance, negative WOM has a total impact of -1.68% on the buy-and-hold abnormal (i.e., by risk factors adjusted) stock return. Source: IMM research Database

Page 26: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

25

Do the different BrandIndex indicators possess differential value relevance?

Buzz

BrandIndex

Stock Return

Quality

Satisfaction

General ImpressionWorkplacereputation

Value

Recommend

Page 27: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

26

Estimated effects on monthly abnormal stock returns in the automotive sector (I)

1.03%**

8.48%**

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Buzz

BrandIndex

n.s. not significant * p < .10 ** p < .05 *** p < .01 (one-tailed test)Note:The simulation considers only estimated coefficients with |t-value| > 1 in the underlying econometric model. This figure reports total effects of a permanent increase by one standard deviation in one of the focal variables. A permanent increase by one standard deviation of, for instance, Buzz has a total impact of 1.03% on the buy-and-hold abnormal (i.e., by risk factors adjusted) stock return. Source: IMM research Database

Page 28: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

27

.89%*

n.s.

n.s.

4.94%**

1.99%**

1.36%

1.91%*

0% 1% 2% 3% 4% 5% 6%

Buzz

General Impression

Value

Quality

Satisfaction

Recommendation

Workplace reputation

Estimated effects on monthly abnormal stock returns in the automotive sector (II)

n.s. not significant * p < .10 ** p < .05 *** p < .01 (one-tailed test)Note:The simulation considers only estimated coefficients with |t-value| > 1 in the underlying econometric model. This figure reports total effects of a permanent increase by one standard deviation in one of the focal variables. A permanent increase by one standard deviation of, for instance, Buzz has a total impact of .89% on the buy-and-hold abnormal (i.e., by risk factors adjusted) stock return. Source: IMM research Database

Validation: The market value of quality

Page 29: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

28

Agenda

1. Why marketing and finance? Because it is relevant.

2. How does marketing influence investors? Signaling and spillover.

3. Is there empirical evidence? Yes, there is!

4. So what?

Page 30: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

29

Reporting of market-based assets: Lack of appreciation!

0 2 4 6 8

Customer satisfaction

Product/service quality

Brand equity

Number of reports referring to metric

Publication of marketing metrics in annual reports(DAX-30 companies: 2007)

Quantitative statements (actual performance metric)

Qualitative statements (e.g., awards)

Source: IMM research

Page 31: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

30

Scenario analysis: Effects of advertising budget reallocation

(Database: German private bank) Newspaper MagazinesØ monthly advertising spending (Jan 2008 - May 2009) 1.4 million Euros 2.9 million Euros

Scenario: Permanent increase of advertising expenditures by 14 k Euros/month

(1.00%) (.48%)

Total costs of permanent advertising expenditure increase (assumption: 5% discount rate)

3.5 million Euros

Market value (MV) (August 2010) 5.2 billion EurosElasticity of MV (assumption: linear response function) .110 · 10² .134 · 10²

Expected MV increase ~5.7 million Euros ~3.4 million Euros

Note: Long-term effects on customers are NOT included. Underlying model

Page 32: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

31

Implications

• Evidence that marketing is value relevant.

• Principles of value based management are generally accepted but value based reporting reflecting the important role of marketing has to be improved.

• Recommendations:1. Go beyond traditional performance measurement.2. Adopt finance language to get the boardroom’s attention.3. Expand (marketing) dashboards/reports by metrics that (should) matter

to the boardroom and external stakeholders.4. and

“Marketing is more important than marketers say it is, but not for the reasons they give us.”(Ramesh Rao, Professor of Finance, University of Texas at Austin, 2009)

Page 33: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

Institute for Market-based Management

BrandIndex Meets Wall StreetWenn Bullen und Bären zu Markenfans werden

Fachsymposium 201030. September 2010YouGovPsychonomics AG, Köln

Sascha Raithele-mail: [email protected]

Be bullish!

Page 34: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

33

Contact_______________________________________________________

Dipl.-Kfm. Sascha Raithel, MBRInstitut für Marktorientierte Unternehmensführung / Institute for Market-based Management (IMM)Fakultät für Betriebswirtschaft / Munich School of ManagementLudwig-Maximilians-Universität MünchenKaulbachstr. 45, 80539 München

Tel.: +49 (0)89 / 2180-5639Fax.: +49 (0)89 / 2180-5651E-Mail: [email protected]: www.imm.bwl.lmu.de_______________________________________________________

Page 35: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

34

Backup

Page 36: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

35

Source: IMM research

22%

2%

13% 14%

8%

-14%

-2%

-19%

-13%-16%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

2003/2004 2004/2005 2005/2006 2006/2007 2007/2008

Mean abnormalstock returns

improved perceived product quality

worsened perceived product quality

Car manufacturers with...

Period:Note: J.D. Power survey data is available about June/July during calender year; this analysis covers the U.S., UK, and German market

The market value of quality

Page 37: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

36

Data: Effects of Media coverage, buzz, and advertising on weekly abnormal stock returns in the finance sector• Two banks and three insurance firms• Sample period: calendar week 2 to 48 in 2008• Buzz:

YouGovPsychonomics AG• Media coverage:

Center for Research on the Public Sphere and Society at the University of Zurich (fög)

• Advertising expenditures (newspaper, TV, radio): Nielsen

• Raw stock returns of firms have been adjusted by general market risk factors

• Analysis on a weekly basis

Page 38: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

37

• 18 car manufacturers

• 32 brands

• Time period: Mar 2008 – Sep 2009

• 19 months

• 608 brand-month-observations

• Raw stock returns of firms have been adjusted by general market risk factors

Analysed car brands

BMW

Daimler

Ford

Fuji

Hyundai

Fiat Honda

Renault

Suzuki

Tata

Toyota

Volkswagen

General Motors

Porsche

Nissan

Mitsubishi

PSA

Mazda

Data: Differential impact of BrandIndex indicators on monthly abnormal stock returns in the automotive sector

Page 39: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

38

Data: The differential impact of advertising media on investors

• Advertising expenditures in Germany for 46 Corporate brands• Sample period: Jan 2008 – May 2009• Raw stock returns of firms have been adjusted by general market risk factors• Analysis on a monthly basis

Media TypeSpending

[k EUR]

% of total sum

Mean per brand/month

[k EUR]

Std.dev. [k EUR]

Maximum [k EUR]

Newspaper 1,310,979.2 20.7 1,560.7 29,343.2 247,426.4

Magazine 897,707.3 14.2 1,068.7 19,274.6 172,585.6

Television 3,074,848.6 48.5 3,660.5 72,141.0 613,551.4

Radio 275,413.5 4.3 327.9 7,284.3 54,547.3

Internet (display) 668,292.8 10.5 795.6 24,533.3 318,162.0

Cinema 10,779.0 .2 12.8 839.7 15,226.2

Outdoor 103,502.8 1.6 123.2 4,938.9 55,053.1

Total 6,341,523.2 100.0 7,549.4 126,441.0 969,456.9

Page 40: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

Institute for Market-based Management

Overview: IMM

Munich School of Management – Ludwig-Maximilians-Universität München

Prof. Dr. Manfred SchwaigerInstitute for Market-based ManagementKaulbachstraße 45D-80539 MünchenTel.: +49 89 2180-5640Fax: +49 89 2180-5651E-mail: [email protected]: www.imm.bwl.lmu.de

Page 41: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

40

• ”Doing the right things“ and „doing things right“ are the secrets of successful management

• ”Doing the right things“ requires the comprehension of management tools

• ”Doing things right“ requires information on KPIs

Management

Marketing

Strategic Planning

Corporate Development

GoalsRecognition Identify problems, risks &

opportunities

Evaluation Analyze problems, risks & opportunities

Decision Solve problems, avoid risks & take opportunities

IMM – Teaching Concept

Page 42: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

41

Appl

icat

ion

Proj

ect S

emin

ars

and

Cou

rses

Action & Controlling Convincing Stakeholders

Measurement & AnalysisMarket Analysis, SPSS Syntax

p

Society

Employees

Suppliers

Government

InvestorsIntangible

AssetsExplanation Consumer InsightsB

asic

sC

orpo

rate

Gov

erna

nce

& M

arke

ting

Customers

Cultural BackgroundInternational Management

IMM – Key Lectures in our Teaching Concept

Page 43: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

42

IMM students combine both analytical skills

and practical experience

Computer Lab Sessions:• Not: as many methods as possible

But: important methods ”ready to use“ in practice

• Good command of established software products (e.g. SPSS, Sawtooth, EXCEL add ons, SmartPLS, AMOS)

Cooperation with Industry Partners:• Project Seminars & Courses• Diploma, Bachelor & Master Thesis• Joint research projects

Guest Lectures and Case Studies:• Insights into practical applications

IMM – Teaching and Practical Experience

Page 44: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

43

IMM – Research Concept

Formal Research (Fundamental Research)

Con

sum

erIn

sigh

ts

Com

petit

ive

Adva

ntag

e

Com

mun

icat

ions

M

anag

emen

t

Empirical Research

Business Theory + Practical Relevance

Page 46: BrandIndex Meets Wall Street - … Meets... · BrandIndex Meets Wall Street 30 September 2010 Institute for Market-based Management 2 Agenda 1. Why marketing and finance? 2. …

BrandIndex Meets Wall Street 30 September 2010

Institute for Market-based Management

45

IMM Team

Prof. Dr. Manfred Schwaiger

Gabriela LatinjakSecretary

Sophie HiekeResearch &

Teaching Assistant

Prof. Dr. Marko Sarstedt

Junior Professor

Sascha RaithelResearch &

Teaching Assistant

Martina LittichResearch &

Teaching Assistant

Richard RinkenburgerResearch &

Teaching Assistant

Elena MichelResearch &

Teaching Assistant

Matthias SchlodererResearch &

Teaching Assistant

Petra WilczynskiResearch &

Teaching Assistant

Lorenz ZimmermannResearch &

Teaching Assistant

Felix KesselResearch &

Teaching Assistant