Financial outcomes of manufacturer brands: a scale development

In today’s competing marketplace, it is becoming increasingly important for both managers and external researchers to understand just what adds value? How is it measured? The accountability of marketing performance as well other intangible assets in the company have stimulated researchers to continue to search for the Holy Grail of accountability (Thomas, 2000). Understanding the accountability and return of marketing expenditure is one of the top priorities of research for the year 2008-2010 in the Marketing Science Institute (Research priorities, 2008). Furthermore, the accountability in B2B industries needs to receive special emphasis and the assessing of return being obtained from marketing investments (Research priorities, 2008). This paper reflects the author’s concern with the gap in understanding financial accountability of manufacturer brands and the offering of some key managerial issues to address financial performance and marketing strategy in the retailing sector. The importance of this dissertation is highlighted with the sources of brand benefits in manufacturer-reseller B2B relationships offered by Glynn Motion and Brodie, (2007). This dissertation extends the findings presented in Glynn et al. (2007) providing qualitative insight explaining retailer’s perception of the financial outcomes provided by manufacturer brands and the development of a scale. Eight in-depth interviews were carried out in the liquor retailing sector to answer the research questions. The results indicate that when evaluating financial outcomes associated with manufacturer brands retailers employ the following measurements: gross margin, retail margin, gross profit, level of discounts, sales volume potential, and rate of customer return. Furthermore, these financial measurements of manufacturer brands vary between different types of liquor retailers due to the size of the retailers and the retailer’s profit orientation. On key finding suggests that retailer’s reliance on computer assistance prevents the retailer’s own understanding of the financial outcomes associated with manufacturer brands. The development of a scale based on the results of this dissertation allows for further research on the topic of marketing accountability