Marketing and Financial Performance of Business

Association of marketing
problems with financial
analysis

Student:
Livia-Iuliana Dragomir

Lecturer / Professor:
Doina Corina erban, PhD

Marketing and Financial Performance of Business

Contents
Executive summary........................................................................................................ 3
Introduction................................................................................................................... 4
The link between Marketing and Financial Analysis.............................................................5
Short introduction in financial analysis...........................................................................5
A few words about Marketing........................................................................................ 5
Reflection of marketing problems in financial analysis......................................................6
Conclusions.................................................................................................................. 7
Recommendation.......................................................................................................... 8
Bibliography.................................................................................................................. 9

Marketing and Financial Performance of Business

Executive summary
Financial analysis is an important and complex process that must be achieved by all the
financial agents. Through its results, potential investors can be tempted to invest and
thus grow the company.
Marketing involves a diversity of actions and plans having as final objective of reaching
to the customers needs and even affiliate new ones.
Having a good idea of how marketing can be used, professionals can even contribute to
the financial analysis by growing the business income with the cost of some expenses
of course.
Although its a powerful tool, be careful how you use marketing in your business
because it can cost you, bad marketing reflects in your financial analysis.

Marketing and Financial Performance of Business

Introduction
The purpose of this document is to show how marketing is linked to the financial
analysis.
Ill also highlight the repercussions of bad marketing over business financial analyses.

Marketing and Financial Performance of Business

The link between Marketing and Financial Analysis

Short introduction in financial analysis
Definition: The set of operations made in order to evaluate a business, project, budget
or other finance-related entities in order to determine its suitability for investment. One
key area of financial analysis involves deducing the company's past performance so a
prediction of company's future performance can be done. 1

Key elements to evaluate in a financial analysis of a business:

Profitability - its ability to earn income and sustain growth in both short- and
long-term. A company's degree of profitability is usually based on the income
statement, which reports on the company's results of operations;
Solvency - its ability to pay its obligation to creditors and other third parties in the
long-term;
Liquidity - its ability to maintain positive cash flow, while satisfying immediate
obligations;
Stability - the firm's ability to remain in business in the long run, without having
to sustain significant losses in the conduct of its business. 2

A few words about Marketing

Marketing represents all the activities that a company does in order to acquire new
customers and maintain a good relationship with them. These activities can include
thank-you letters and even casual meetings with a prospective client.
The main goal of marketing is to ensure the profitability of a business by matching the
companys products and services to the people that might need or want them.
1 http://www.investopedia.com/terms/f/financial-analysis.asp
2 https://en.wikipedia.org/wiki/Financial_analysis

Marketing and Financial Performance of Business

Reflection of marketing problems in financial analysis

Marketing can be one of the most powerful tools in the growth of a company, thereby an
important element in the financial analysis.
Although it can be a really useful tool, it can be also a two sided blade. Bad marketing
or poor usage of it can have a negative impact on the financial analysis.
One of the big problems found in marketing is the lack of marketing expertise. A
marketing plan should be developed in such way to complement the goals and
resources of the organization. Unfortunately, there are businesses that become over
ambitious and go for an extreme marketing campaign thats not necessary for their
business type. This leads to depletion of funds, which could be used for other purposes.

Lack of direction represents another problem that marketing can encounter. Instead of
focusing in targeting the desired audience by working on customer preferences and
choices, there are marketing professionals that are trying to impress the management
thus the marketing fails to achieve its purpose. Even more, money invested in the
campaign are lost.

A big opportunity for small businesses that dont have a consistent budget is the internet
marketing. This type of marketing can be cheaper than the rest. Unfortunately, some of
the financial agents dont take this opportunity.
There are also other that use this type of marketing, but dont take advantage of its
entire potential. Even more, they do basic mistakes like:
-

Not updating their websites regularly. This might affect the image of the company
because customers see something on a website, they can place the order and
then hes told the product is not available anymore.
There might also be the case where a wrong price is shown and then another
one gets on the bill. In this case its not only the image of the company thats
affected but also its budget can be affected by a trial.
Its too expansive! this could be the perception of some uninitiated marketing
professionals in internet marketing. This is a bad perception because internet
marketing is quite inexpensive compared to traditional marketing strategies. If it

Marketing and Financial Performance of Business

will be used effectively, a website can also provide you a good platform to sell
products or services online.

Conclusions
Why is financial analysis important?
If a potential investor shows interest in investing in a company, he will first
consider the financial analysis of this business in order to establish if its stable or
profitable enough.

Why is marketing important?

A marketing strategy is the backbone of any business. It what makes customers
and investors see you on the market. A good marketing strategy should correlate
well with the goals of the business.

Marketing and Financial Performance of Business

Recommendation
When a financial agent establishes the goals of the business he should NEVER forget
about marketing.
A good plan of marketing that focuses on the clients needs and want is most likely
to succeed and accomplish its purpose of selling products or services.
Dont forget about the internet marketing. Nowadays its quite popular for investors and
customer to use the internet to get information about available products and even
businesses image.
Having this said, dont forget to update your website if you have one and if you dont,
what you are waiting for?

Marketing and Financial Performance of Business

Bibliography
-

http://www.investopedia.com/terms/f/financial-analysis.asp
https://en.wikipedia.org/wiki/Financial_analysis
Definition of Performance of Business Role of Marketing in Performance of
Business Evaluation course, Professor Doina Corina erban, PhD