Golden mean

Date of publication: June 15, 1996

Abstract:

This paper postulates that the conflict between the finance and consumer measures in an organisation can be overcome by keeping in mind the overall goals of the organisation. This goal is defined to be - Maximising Shareholder Value. The paper develops a practical framework which provides linkages between the strategic and operational brand management decisions and the end goal. This is achieved by identifying “Relatable Key Result Areas” for managers at different levels, which are conclusively linked to Shareholder Value through the concept of Free Cash Flows. The paper uses case studies to illustrate the same. In a scenario where the marketing and finance functionaries of an organisation are asked to march to their idea of the “brand equity” tune, in all likelihood, a divergence of paths and rhythm would be seen. In fact, none of us would be surprised if there is a substantial divergence in these paths. Both the functions tend to hold steadfast to their own beliefs and ideas on what brand equity is and what it means to the organisation, and this leads to the conflict of “consumer measures v/s. financial measures”.

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