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Measuring the relationship between marketing assets, intellectual capital and firm performance

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Abstract

Although the literature highlights the contribution of different marketing assets to firm performance, it is still far from reaching a consolidated and exhaustive position on this topic. Several authors have, in fact, proposed metrics and performance measurement systems related to marketing strategies, but the relationship between specific marketing resources and overall firm profitability needs further analysis and empirical research. This paper proposes a framework to measure the effect of the use and interaction of different marketing assets on firm performances, through their impact on the level of the firm’s intellectual capital. We test our framework by adopting a quantitative approach, providing evidence from within the Italian children’s clothing industry. Specifically, we measure the intellectual capital using the knowledge capital scorecard method proposed by Lev (Gu and Lev in Intangibles assets. Measurement, drivers, usefulness. New York University, New York, 2001; Seetharaman et al. in J Intellect Cap 3(2):128–148, 2002) and we analyze it by modeling some firm-specific variables such as brands, stores, advertising expenses, the balance sheet’s intangible assets and their interactions. The empirical analysis highlights that: (a) there is a positive direct relationship between a firm’s intellectual capital value and its performance; (b) the combination and interaction of specific marketing resources affect the intellectual capital value. The results show that the intellectual capital value can be used as a synthetic indicator to evaluate the impact of some specific marketing resources on business performance.

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Notes

  1. We refer to the International Financial Reporting Standards (IFRSs).

  2. Although some authors argue that the terms intangibles, immaterial resources, intangible assets, intellectual capital all refer to the same concept (Lev 2001), we prefer to use the term “intellectual capital” as an aggregate of individual intangible assets.

  3. From the fifties to the mid-eighties, researchers have progressively realized that book values are unable to express the value of intangible assets. The measurement of the “q” ratio proposed by Nobel recipient James Tobin, or the methods to assess the value of human resources developed by Erik Flambolts, are the most significant examples (Sveiby 2010).

  4. With regard to this, a large number of the proposed methods are found in managerial and consulting practices (Bontis 2001).

  5. In the low market segment, firms consider the pricing strategy the most important variable that helps explain the decision of many firms to source from low labor cost countries, especially Turkey, Romania, and China (Databank 2009).

  6. The sources of the data are Centro Studi SMI and Databank.

  7. The exclusion of outliers is a methodologically suggested practice (Wooldridge 2003, p. 300).

  8. We refer here to the EU classification, which considers large firms as those with a 50 M Euros or higher turnover, medium firms as those with a turnover between 10 and 50 M Euro, and small firms those with revenues under 10 M Euro. In borderline cases we considered the number of employees (small firms with less than 50 employees, medium firms with between 50 and 249 employees, large firms with at least 250 employees).

  9. The decision is also supported by the fact that for none of the firms observed the value of financial assets was higher than the financial liabilities.

  10. The net operating working capital is the difference between all current assets required in operations (cash, accounts receivable, inventories, etc.) and all non-interest-bearing current liabilities (accounts payable, accruals, etc.).

  11. The Italian balance sheet considers the following as immaterial fixed assets: installation and extension costs, R&D costs, advertising costs, patents, copyright, concessions, licenses, trademarks and other similar rights, goodwill (in the case of acquisitions), and other immaterial fixed assets.

  12. The market share is measured as the firms’ turnover of in relation to the total industry turnover.

  13. The analysis was conducted using the SAS software.

  14. The weight of the intellectual capital value is negative when the residual income that can be referred to intangibles is negative. In this case, the intellectual capital value is, by hypothesis, 0.01%.

  15. The F test makes it possible not to consider the reduced model.

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Authors and Affiliations

  1. Department of Business and Law, University of Siena, Piazza San Francesco 8, 53100, Siena, Italy

    Tommaso Pucci & Lorenzo Zanni

  2. Dipartimento di Scienze per l’Economia e l’Impresa, University of Florence, Via delle Pandette, 9, 50127, Florence, Italy

    Christian Simoni

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  1. Tommaso Pucci
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Pucci, T., Simoni, C. & Zanni, L. Measuring the relationship between marketing assets, intellectual capital and firm performance. J Manag Gov 19, 589–616 (2015). https://doi.org/10.1007/s10997-013-9278-1

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