The Interplay between Cumulative Customer Satisfaction and Brand Value: Its Effect on Cash Flow, ROI and Tobin's Q

33 Pages Posted: 10 Sep 2007

See all articles by Luis Fernando Angulo

Luis Fernando Angulo

Autonomous University of Barcelona

Josep Rialp

Autonomous University of Barcelona - Department of Business Economics

Date Written: September 8, 2007

Abstract

This research focuses its attention to empirically investigate the interplay between cumulative customer satisfaction and brand value as well as its effect over firms' performance. As literature review suggests, both cumulative customer satisfaction and brand value have been probed as regards the isolated impact of each of them on financial performance. Nevertheless, when both of them put together into action, there is no empirical evidence which support such interplay effect. Theoretically speaking, both cumulative customer satisfaction and brand value play a strategic role in marketing. Based on resource based view, marketing paradigm approach, market-based assets perspective and operational management; we found a theoretical link between them. The link have been called marketing efficiency, i.e. the ability of firms to maximize both cumulative customer satisfaction and brand value, better than competitors, under the same amount of marketing expenditures. In that sense, we provide empirical evidence through modelling marketing efficiency using data envelopment analysis and researching the effect of such interplay applying three stages least square regression. The results demonstrate that marketing efficiency has a positive direct effect on cash flow and ROI, and positive indirect effect, through cash flow, on Tobin's Q.

Keywords: Brand Value, Interbrand, Cumulative Customer Satisfaction, ACSI, Marketing Efficiency, Cash flows, ROI, Tobin's Q

JEL Classification: L11, L21, L66, L67, L81, L86, M31

Suggested Citation

Angulo, Luis Fernando and Rialp-Criado, Josep, The Interplay between Cumulative Customer Satisfaction and Brand Value: Its Effect on Cash Flow, ROI and Tobin's Q (September 8, 2007). Available at SSRN: https://ssrn.com/abstract=1008008 or http://dx.doi.org/10.2139/ssrn.1008008

Luis Fernando Angulo (Contact Author)

Autonomous University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

Josep Rialp-Criado

Autonomous University of Barcelona - Department of Business Economics ( email )

Edifici B - Campus de la UAB
Bellaterra (Cerdanyola del Vall├Ęs)
Barcelona, Barcelona 08193
Spain

HOME PAGE: http://selene.uab.es/dep-economia-empresa/personal/personal.htm

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