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Kalra and Soberman (see the article The Curse of Competitiveness: How Advice from Experienced Colleagues and Training Can Hurt Marketing Profitability in the May 2008 issue) provide a key insight about competitiveness: Too much of this competitiveness trait may hurt the firm.

However, in practice, most firms take the smug view that competitiveness is a virtue. Implicit in this is the questionable assumption that as competitiveness increases, it helps the firm in question but hurts other competing firms. This is not unlike how many firms mistakenly view advertising (i.e., too much advertising cannot hurt a given firm).

The authors provide experimental evidence that indicates that managers are better off if they do not rely on either experienced colleagues or training when competitiveness increases. More specifically, marketing profitability decreases when competitiveness increases. These results may raise questions about decision-support systems when firms assume that the preservation of institutional wisdom (in the form of advice from experienced senior managers) may be detrimental.

I invite you to read this article and to share your views here.

By Siva K. Balasubramanian, Journal of Marketing Web Site Editor

Posted by Francesca V. Cooley at 8:10 PM | Permalink | Comments (3)

Wiesel, Skiera, and Villanueva (see article Customer Equity: An Integral Part of Financial Reporting in the March 2008 issue) make an eloquent case that firms should report new forward-looking metrics about customer assets in a manner helpful to investors. Their assertion appears consistent with the spirit of IASB and FASB requirements. More important, the authors argue that the widespread adoption of such metrics may facilitate “marketing’s reentry into the boardroom because it aligns customer management with corporate goals and the investor’s perspective" (p. 2).

The approach advocated in the article is rather simple. It involves two elements: customer equity statement and customer equity flow statement. Furthermore, the authors identify five critical criteria for customer equity-based financial reporting: future orientation/decomposition, objectivity, comparability, simplicity, and cost effectiveness.

As a discipline, a criticism often leveled at marketing is that it has developed far too many metrics whose financial implications are either weak or not obvious. A key contribution of this article is to advocate for and to demonstrate the potential of an idea that appears timely and relevant.

In general, blog threads for the Journal of Marketing have attracted spirited discussion among JM readers and others. I look forward to your responses to the profound questions raised by Wiesel, Skiera, and Villanueva in their recent article. Please take a few moments to contribute your thoughts to this blog thread now.

By Siva K. Balasubramanian, Journal of Marketing Web Site Editor

Posted by Francesca V. Cooley at 7:56 PM | Permalink | Comments (5)