Marketing investment courage and financial performance - A study of profiles and financial implications among Finnish firms

Abstract

The purpose of this study is to research what marketing investment courage is and how it can impact firms’ financial performance. The literature review provides a theoretical overview of marketing investments, their characteristics and targets, investment courage and the routes through which marketing investment courage can impact firms’ financial performance through actual investments. The empirical study investigates the current state of marketing investment courage among Finnish companies.

The empirical data were collected through an online survey aimed at CEOs and marketing directors of Finnish companies. The effective sample of the survey was 545. Several multivariate data analysis techniques were used to study the current state of marketing investment courage within Finnish firms. First, the data were analyzed with factor analysis to identify the dimensions of marketing investment courage in terms of investment targets. Second, different marketing investment courage profiles in terms of courage to invest in sets of marketing-related actions and sub-goals were identified by clustering the respondents, and the groups were characterized through contextual background variables. Finally, these groups were examined with analysis of variance to discover the possible differences in financial performance between the groups with different marketing investment courage profiles.

The findings of the study identified five dimensions of marketing investment courage in terms of investment targets, named “Awareness creation and communication”, “Customer relationship and product/service development”, “Skilful workforce”, “Distribution networks and company acquisition” and “IT-systems for customer relationship management”. These dimensions were emphasized differently in the different marketing investment courage profiles identified. Differences in the financial performance between the groups were found, especially indicating a lower profit performance of the group having little courage to invest in any marketing-related actions and sub-goals compared to the other groups.

The study provides an overall view of the current marketing investment practices in Finland and sheds light on how marketing investment courage can impact financial performance. The results serve as a ground for further investigations concerning particular industries or countries and qualitative studies on the underlying reasons for specific marketing investment practices.