Value Above Cost Driving Superior Financial Performance with CVA, the Most Important Metric You've Never Used
, by Sexton, Donald E.- ISBN: 9780136043324 | 0136043321
- Cover: Hardcover
- Copyright: 4/6/2009
Donald E. Sexton, Ph.D., is Professor of Business at Columbia University, where for more than forty years he has taught marketing and quantitative methods and earned the Business School’s Distinguished Teaching Award. His numerous articles on marketing return, marketing, and branding strategy have appeared in publications such as the Harvard Business Review, Journal of Marketing Research, and Management Science. He is often quoted in media such as The New York Times, BusinessWeek, and WCBS. Dr. Sexton is the principal of The Arrow Group, Ltd.® which has provided consulting and training to companies such as GE, IBM, Pfizer, Unilever, Citigroup, DuPont, and Verizon. He has taught at the China Europe International Business School, UC-Berkeley, INSEAD, the Indian School of Business, the Australian Graduate School of Management, Skolkovo, and the U.S. Business School in Prague. Sexton holds an M.B.A. and Ph.D. from the University of Chicago in business economics, statistics, and mathematical methods and a B.A. from Wesleyan University in mathematics and economics. His books include Marketing 101, Branding 101, and Marketing and Management Science.
Foreword | p. xviii |
Acknowledgments | p. xx |
About the Author | p. xxi |
Marketing and Financial Performance | p. 1 |
Determining Marketing Accountability | p. 5 |
The Value of a Business | p. 7 |
Customer Value and Costs | p. 9 |
Perceived Value | p. 10 |
A New Definition of Marketing | p. 11 |
CVAŽ | p. 12 |
Cost Orientation | p. 13 |
Value Orientation | p. 17 |
CVAŽ Orientation | p. 19 |
Strategic Themes | p. 21 |
Design and Communication | p. 25 |
CVAŽ and Economic Development | p. 29 |
Conclusions | p. 32 |
How CVAŽ Affects Financial Performance | p. 33 |
CVAŽ and Financial Performance: Executive Summary | p. 33 |
Perceived Value and Price | p. 35 |
Demand Curves | p. 39 |
Perceived Value and Revenue | p. 41 |
Contribution | p. 42 |
Revenue and Contribution: An Example | p. 44 |
Shifting the Demand Curve | p. 45 |
Sexton's Laws | p. 48 |
Sexton's Revenue Law | p. 48 |
Sexton's Contribution Law | p. 50 |
Employing Sexton's Contribution Law | p. 52 |
Contribution and Profit, Cash Flow, Shareholder Value, and Share Price | p. 56 |
CVAŽ and Life Time Customer Value | p. 58 |
Conclusions | p. 62 |
Appendix: Derivations | p. 63 |
CVAŽ over Time | p. 65 |
Levels of Sales Life Cycles | p. 66 |
The Competitive Life Cycle | p. 67 |
Sales Life Cycle | p. 69 |
Margin Life Cycle | p. 69 |
Unit Cost Life Cycle | p. 69 |
Perceived Value Life Cycle | p. 70 |
CVAŽ Life Cycle | p. 73 |
Financial Performance over Time | p. 76 |
Brand Equity | p. 78 |
Valuing Brand Equity | p. 81 |
Estimating Brand Equity | p. 83 |
Conclusions | p. 86 |
Perceived Value | p. 89 |
Expected, Actual, and Perceived Performance | p. 90 |
Marketing Ratios | p. 91 |
Determinants of Perceived Value | p. 92 |
Branding and Perceived Value | p. 95 |
Development of Perceived Value | p. 98 |
Stages of Buyer Behavior | p. 99 |
Managing Perceived Value | p. 104 |
Measuring Perceived Value | p. 112 |
Estimating Demand Curves | p. 121 |
Conclusions | p. 125 |
Costs | p. 127 |
The Income Statement in Custodial Format | p. 127 |
Types of Costs | p. 129 |
The Income Statement in Contribution Format | p. 131 |
Identifying Costs for CVAŽ | p. 134 |
Employing the Variable Margin Rate | p. 136 |
Graphing Contribution | p. 138 |
Fixed Costs | p. 139 |
Breakeven Sales Level | p. 139 |
Direct and Indirect Fixed Costs | p. 144 |
Shutdown Sales Level | p. 146 |
Evaluating Contribution | p. 147 |
Conclusions | p. 149 |
Managing CVAŽ | p. 151 |
Marketing Strategy Versus Marketing Tactics | p. 151 |
Components of a Marketing Strategy | p. 154 |
Identifying Possible Target Markets | p. 156 |
Evaluating Possible Positions for the Product or Service | p. 159 |
Determining Design | p. 167 |
Selecting Target Segments | p. 170 |
Developing Communications | p. 173 |
Managing the Brand | p. 176 |
Conclusions | p. 179 |
Managing CVAŽ over Time | p. 181 |
Managing CVAŽ Through the Market Life Cycle | p. 181 |
Financial Objectives Throughout the Competitive Life Cycle | p. 185 |
Managing CVAŽ Throughout the Competitive Life Cycle | p. 187 |
Introduction Stage | p. 192 |
Rapid Growth Stage | p. 196 |
Competitive Turbulence Stage | p. 199 |
Maturity Stage | p. 202 |
Decline Stage | p. 203 |
Optimizing Financial Performance over Time | p. 205 |
Conclusions | p. 210 |
Utilizing CVAŽ for Strategic Decisions | p. 211 |
Targeting | p. 212 |
CVAŽ and Market Segmentation | p. 215 |
Using CVAŽ to Target Market Segments | p. 219 |
Positioning | p. 223 |
Using CVAŽ to Determine Positioning | p. 226 |
Using CVAŽ to Evaluate Multiple Positions | p. 227 |
CVAŽ and "Grey Markets" | p. 232 |
Branding | p. 233 |
Using CVAŽ to Build a Brand | p. 235 |
CVAŽ and Brand Architecture | p. 237 |
CVAŽ and Brand Extensions | p. 241 |
CVAŽ and Co-Branding | p. 243 |
Conclusions | p. 246 |
Utilizing CVAŽ for Marketing Program Decisions | p. 247 |
Communications | p. 249 |
CVAŽ and Communications | p. 255 |
Using CVAŽ to Determine Communications Spending | p. 257 |
Pricing | p. 259 |
CVAŽ and Pricing | p. 262 |
Using CVAŽ to Determine Pricing | p. 262 |
Pricing in Multiple Markets | p. 265 |
CVAŽ and Distribution | p. 269 |
Conclusions | p. 273 |
Building the Marketing Accountability Scorecard | p. 275 |
General Practice | p. 276 |
Use of Specific Marketing ROI Measures | p. 279 |
Searching for a Marketing Accountability Scorecard | p. 284 |
Conclusions | p. 291 |
Organizing to Manage CVAŽ | p. 293 |
How Individuals and Organizations Behave | p. 295 |
Task Clarity | p. 297 |
Effort | p. 299 |
Rewards | p. 300 |
Capabilities | p. 301 |
Environment | p. 307 |
Results | p. 309 |
Conclusions | p. 310 |
Endnotes | p. 311 |
Index | p. 329 |
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