528 The Marketing Book
sarily indicates a competitive advantage or
disadvantage because it may be the source of
the customer-perceived differentiation, which
in reality creates the super profit. For these
businesses, the focus needs to be on the value-
added elements rather than on the costs. This
forces finance managers to become involved in
the assessment of ‘perceived use values’ (where
the perception is by the customers) of the
differences between competing products. The
perceived added value is then compared to the
incremental cost incurred in achieving the
difference, with any resulting positive value
gap being evaluated for sustainability.
This type of involvement raises several
issues for the way marketing and finance need
to work together.
Organizational structures: marketing finance managers
If the integrated and tailored approach to
controlling marketing which has been set out in
this chapter is to be achieved, marketing and
finance managers need to work very closely
together at all stages of the marketing process.
The rigorous financial evaluation of strategic
marketing decisions requires a close involve-
ment of finance managers at the earliest stage
possible. Yet this close involvement must con-
tinue during the implementation of the strategy
if proper control is to be exercised and the
necessary amendments to the strategy are to be
made in a timely manner.
This continuous close involvement can
only really be achieved if finance has a sub-
stantive presence within the marketing area.
Increasingly, this is being achieved by the
creation of the roles of marketing finance
managers, who are physically located in the
marketing area and are seen as part of the
marketing management team. As such, they are
automatically involved in the development of
the marketing strategy, its implementation,
modification and control. Indeed, in some
businesses they now share some managerial
performance measures with their marketing
colleagues, yet they have a clear financial
responsibility to remain objective in their finan-
cial evaluations.
The marketing finance manager can also
act as a co-ordinator and facilitator for the
many inputs which are needed for the strategic
competitor analysis which has been advocated
during the chapter. In some companies this
analysis has been supplemented by customer
profitability analyses and even supplier profita-
bility analyses; where well done, these enable a
complete picture of the industry value chain to
be developed. This can aid the strategy devel-
opment process immensely, as it can indicate
future opportunities and threats at different
levels in the total supply chain.
Summary
Controlling marketing involves far more than
recording and analysing the accounting trans-
actions which result from marketing activities.
It should be regarded as a two-stage process
involving the pre-commitment financial evalu-
ation of proposed marketing expenditures, as
well as the ongoing control over these expendi-
tures as they take place.
The objectives of these different marketing
activities are very diverse, but marketing has
itself developed appropriately tailored evalu-
ation processes and non-financial effective
measures. The challenge for finance is to find
equally tailored and value-added ways of
controlling marketing expenditures, which link
these activities to the overall objectives of the
organization.
This requires a high degree of integration
between marketing and finance, and a sub-
stantial level of tailoring in the marketing
accounting system and resulting performance
measures. Ideally, if the marketing strategy
changes significantly, this should lead to a
corresponding change in the tailored marketing