The Marketing / Accounting Interface

Robin Roslender, Richard M.S. Wilson

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9780415628860
• eBook ISBN: 9781135743314
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

When marketing managers and financial managers join forces within any business, the result can often be poor communication on financial criteria and goals. The risk of this situation occurring is inevitably present when those with different professional backgrounds and roles are working in accordance with their own norms.

In his seminal 1956 paper on general systems theory, the economist Kenneth Boulding referred to the phenomenon of "specialised ears and generalised deafness", which can be seen to exist when marketing managers are financially illiterate or when financial managers lack the necessary insights to design, implement and operate accounting systems which are useful to marketing managers in carrying out their roles.

It is increasingly difficult to attach credence to the idea of marketing managers who lack financial skills, or financial managers who fail to relate to the context in which marketing managers operate. Understanding the marketing/accounting interface is therefore important in generating emergent properties from the interaction of marketers and accountants whereby the whole is greater than the sum of the parts. The chapters in this volume seek to address this challenge.

This book was originally published as a special issue of the Journal of Marketing Management.

Introduction
The marketing / accounting interface

Robin Roslender, Heriot Watt University, UK
Richard M. S. Wilson, Loughborough University, UK

Abstract

Given: one marketing manager and one accounting manager. Finding: poor communication on financial criteria and goals.

(Berry 1977: 125)

The risk of this situation occurring is inevitably present when those with different professional roles are working in accordance with their own norms.

In his seminal paper on general systems theory, the economist Kenneth Boulding (1956) referred to the phenomenon of “specialised ears and generalised deafness”, which can be seen to exist when, for example, marketing managers are financially illiterate or accountants lack the necessary insights to design, implement and operate accounting systems which are useful to marketing managers in carrying out their roles. It is increasingly difficult to attach credence to the idea of marketing managers who lack financial skills, or accountants who fail to relate to the context in which marketing managers operate, hence understanding the marketing/accounting interface is important in generating emergent properties from the interaction of marketers and accountants (whereby the whole is greater than the sum of the parts).

As Hopwood noted (1976: 227):

It is paradoxical that whilst many of the most significant financial and accounting activities within any company start with the forecasts of market opportunities, sales volumes, prices and anticipated revenues, the explicit role of accounting and finance in the control of the marketing function itself has been neglected.

Those studying for an undergraduate degree or a master's degree in business administration or management studies will almost certainly be required to take courses in both Marketing and Accounting – although it is unlikely that the academic curriculum will focus on the interface of these two disciplines.

Some years ago, within two UK professional bodies (both of which have many registered students around the world) there was an explicit recognition within the respective curricula/examinations of the Chartered Institute of Marketing (CIM) on the one hand, and the Chartered Institute of Management Accountants (CIMA) on the other, of the importance of avoiding generalised deafness due to specialised ears. The CIM syllabus included a paper entitled “Financial Aspects of Marketing”, and the CIMA syllabus included a paper entitled “Organization and Marketing Management”. Neither of these papers has survived as a separate component of either curriculum, however; financial awareness is currently deemed to be implicit in the CIM's syllabus, as is marketing awareness within the CIMA's syllabus. This seems grossly unsatisfactory given the relative importance of having financially aware marketers, and accountants who recognise the imperatives of marketing orientation, if the effectiveness of organisations is to be enhanced.

The literature on the marketing/accounting interface can be traced back over many years – as is evident in Harrison's 1981 review. Early contributions were made by US-based authors such as Culliton, Goodman, Longman, Mossman, Sevin, Schiff, Bursk, with Canadian contributions from Shapiro, Australian contributions from Ratnatunga, and more recent British contributions being provided by Simmonds, Guilding, Piercy, Ambler, Shaw, Doyle, Roslender, Ward and Wilson.

In 2006 a Call for Papers was issued (see Appendix), the responses to which included the papers collected in this themed double issue of JMM. These papers could be located within the schematic framework of five key managerial questions which provides the structure of Wilson and Gilligan (2005), namely:

•Where are we now?

•Where do we want to be?

•How might we get there?

•Which way forward is best?

•How can we ensure arrival?

The second and third of these five key questions are the concerns of top management and senior/middle management respectively in specifying ends and means. The interface between marketing and accounting is more evident in relation to Question 1 (re Planning), Question 4 (re Decision-making) and Question 5 (re Control).

However, given the clustering of the accepted papers we thought it more appropriate for the purposes of this collection of papers to locate them as follows, with an increasing emphasis on metrics and customers as one works through the collection:

Studies on the marketing/accounting interface

Baljit K. Sidhu and John H. Roberts

The marketing/accounting interface – lessons and limitations

This paper explores the issues giving rise to the challenges on the interface and urges a stronger marketing-financial analyst dialogue, underpinned by a stronger marketing accounting shared language.

Robert M. Inglis

Exploring accounting and market orientation: an inter-functional case study

The findings from an inter-functional case study highlight a number of factors which potentially moderate the adoption of market-oriented accounting (MOA), and reveal a space in conceptual linkages between market orientation and contemporary management accounting techniques.

Nevine El-Tawy and Tony Tollington

The recognition and measurement of brand assets: an exploration of the accounting / marketing interface

The asset recognition criteria presented in this paper break free from the narrow, definitional and rule-based perspective of accounting epistemology to offer an alternative view based on the recognition of artefacts and the related notion of separability.

Applications

Tim Ambler and John H. Roberts

Assessing marketing performance: don't settle for a silver metric

This paper starts with the premise that marketing should be accountable, and considers by which measure (or measures) it should be held to account. It proceeds to rigorously evaluate alternative ‘silver metrics’ and comes out in favour of multiple metrics for assessing marketing performance.

Paul A. Phillips and Sue Vaux Halliday

Marketing / accounting synergy: a discussion of its potential and evidence in e-business planning

This paper sheds light on how e-business planning is taking place and identifies the key areas which are, together, acting as barriers to aligning organisational design, structures and people in the digitised world. It presents empirical evidence of de facto leadership being taken by the IT function, to the detriment of what might otherwise have been developed (i.e. a synergistic relationship between the marketing/ accounting planning interface and business performance).

Focusing on the customer

Christopher Guilding and Lisa McManus

Exploring the potential of customer accounting: a synthesis of the accounting and marketing literatures

In this paper a review of the marketing and accounting literatures shows that, to date, no previous study has examined the intersection of the marketing and accounting literatures pertinent to customer accounting (CA). It provides a synthesis of these two literatures in exploring the potential of CA.

Kenneth Weir

Examining the theoretical bases of customer valuation metrics

In this paper the intensification of marketing activity in the last 20 years, giving rise to greater needs for customer valuation and profitability metrics, is explored. The author seeks to clarify the theoretical influences underpinning alternative approaches, and offers some implications for the future development of customer valuation metrics.

Robin Gleaves and Jamie Burton

Accounting is from Mars, marketing is from Venus: counselling both disciplines to improve conceptualisation of customer profitability in business management

Marketing and management accounting have traditionally been poles apart in terms of both focus and approach, which highlights the need for greater synergy. In this paper a case is made (via a novel conceptual model) to establish a common ‘platform of unders...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Notes on Contributors
• 1. Introduction The marketing / accounting interface
• 2. The marketing accounting interface — lessons and limitations
• 3. Exploring accounting and market orientation: an interfunctional case study
• 4. The recognition and measurement of brand assets: an exploration of the accounting/marketing interface
• 5. Assessing marketing performance: don't settle for a silver metric
• 6. Marketing/accounting synergy: a discussion of its potential and evidence in e-business planning
• 7. Exploring the potential of customer accounting: a synthesis of the accounting and marketing literatures
• 8. Examining the theoretical influences of customer valuation metrics
• 9. Accounting is from Mars, marketing is from Venus: establishing common ground for the concept of customer profitability
• 10. Determining the indirect value of a customer
• 11. The marketing / accounting synergy: a final word but certainly not the last word
• Index