THE RELATIONSHIP BETWEEN MARKETING, PERFORMANCE AND ANALYSTS FORECASTS FROM THE VIEW OF MARKETING CAPABILITY
Name: GILMAR GOMES GAZONI JUNIOR
Publication date: 27/07/2022
Advisor:
Name |
Role |
|---|---|
| MARCELO MOLL BRANDÃO | Advisor * |
Examining board:
| Name |
Role |
|---|---|
| HÉLIO ZANQUETTO FILHO | Internal Examiner * |
| MARCELO MOLL BRANDÃO | Advisor * |
Summary: The role of marketing for business performance has received great attention from
researchers in the field and in recent decades the conceptual understanding of this
role has improved, allowing companies to create and sustain competitive advantage.
However, Luo and Jong (2012) point out that directly relating marketing to the
company´s financial performance can be misleading, indicating that there are many
variables missing in such studies. In this sense, some papers analyze the influence of
financial analysts´ forecasts on the relationship between marketing and financial
performance . More recent papers have shown that the financial analyst began to exert
pressure on managers for results, influencing their marketing investment decisions and
generating consequences for long-term performance. However, such papers, when
considering only marketing resources, leave gap by ignoring the role of marketing
capability for companies´ financial performance. According to Morgan (2012),
marketing resources can only generate better results when they are transformed by
the marketing capacity. This research had the general objective to investigate how the
marketing capability interacts and influences the relationship between financial
analysts´ forecasts, marketing resources and financial performance, already observed
in the literature. Specifically, the effect of pressure from financial analysts on marketing
resources was observed, as observed in previous studies, on marketing capability and
on company performance. The relationship between marketing resources and
marketing capability was also verified, as well as their contribution to the company´s
performance. Furthermore, due to the different metrics for marketing resources found
in the literature, I investigated the impact of the choice of the marketing resources
metric on the results and the relationship of these metrics with the marketing capability.
Additionally, aiming at greater robustness, I also verified whether the effect of analyst
pressure on marketing resources, marketing capability and company performance can
be enhanced or mitigated by the company´s strategic positioning through its investment
in research and development (R&D) and the size of the company measured by its total
assets. To achieve the proposed objectives, companies with shares traded on the
NASDAQ and NY stock exchanges from 1995 to 2021 were analyzed using panel data.
First, the results evidenced the pressure exerted by the financial analysts forecast
negatively influence marketing resources measured by selling, general and
administrative expenses (SG&A) and on marketing capability. However, it was
observed that companies with greater pressure from financial analysts try to increase
their specific expenses with marketing resources measured by advertising. With regard
to financial performance, it was evidenced that the pressure of the financial analyst
negatively influences the total return and the market cap, but positively influences the
corporate abnormal return. The results also showed that marketing resources and
marketing capability significantly contribute to the company´s financial performance.
Finally, it was observed that companies with greater investment in R&D and larger size
have a lower effect of pressure from the financial analyst on marketing (resources and
capability) and on financial performance (abnormal return and total return). Thus,
showing that the inclusion of marketing capability in studies related to the impact of
pressure from financial analysts on marketing and company performance contributes
to a better understanding of the topic.
