Prof. Peter Dickson discusses the FIU Marketing Department’s two-year old initiative that teaches marketing accounting metrics and financial analysis in its undergraduate and graduate Introduction to Marketing courses.

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In our second “Professor In The Hot Seat” we sat down with Peter Dickson, Ryder Eminent Scholar in Global Logistics at Florida International University, who has become a passionate believer in teaching marketing accounting metrics and financial analysis in undergraduate and graduate Intro to Marketing courses.

Why do you think the Intro Marketing course should teach marketing accounting metrics and financial analysis?

Two big picture answers. Marketing is the singular business discipline responsible for commercializing innovation, and for wealth-creating exchanges. And yet we in marketing do not teach all business students about marketing costs, margins and the crucial importance of measuring the capital/shareholder value creation effects of marketing decisions. We concluded that such analysis should be introduced early and then used often throughout all marketing and sales courses. Our AACSB re-accreditors agreed with us and strongly encouraged the initiative because they wanted to see some standardization of course content and testing, an increase in our Intro courses’ analytic rigor and an assurance of learning effort. We  tried to oblige!  

Second, all of the experts agree that the future of the U.S. economy depends on the profitable commercialization of innovative new products and services. Sooner or later, hopefully sooner,  President Obama, State Governors, American business leaders and especially our higher education leadership will accept that this is Marketing’s domain…not Economics’ domain, not Engineering’s domain, not Management, certainly not Finance (God save us from any more innovative Financial products!), but Marketing’s domain. When this happens, U.S. Business School Deans and Marketing Departments will be put on notice and given resources to teach our students how to market products and service innovations a whole lot better than we currently do. Part of this imperative will involve better teaching of marketing accounting and financial analysis skills. Even if all of this does not happen, we’re delivering a lot more value to our students. And one thing for sure: the course no longer has a “patsy” reputation amongst students at FIU. Before this initiative the core marketing undergraduate course was rated the easiest core course by far by Business students: fun, interesting but easy. Understandably, this rating did not sit well with us because it meant we attracted all the students looking for an easy major. 

What do you say to those who say that this is the responsibility of accounting and finance?

I agree. However, over my 30 years of teaching at several Universities, time and again they have been asked, and time and again they have been allocated more resources, yet failed to provide the training. A major reason is that management accounting has been an academic backwater in the field of Accounting for decades. The sales and marketing teaching profession cannot continue to look the other way or wash their hands of responsibility. It has contributed to the trivializing and devaluation of our great discipline. If American traders, marketers and salespeople cannot quantify the profitability of what they are talking about, then they do not fully understand what they are talking about. We think this is one reason why our discipline is disrespected. We decided it was time to grab the nettle and try to do something about it.

Well, if we have to do it ourselves, how can we expect marketing professors who have never been trained in marketing metrics, accounting and finance to teach this in Intro courses?

We can’t. It would be completely unreasonable. That is why we developed a truly self-contained online tutorial that teaches these skills. The Marketing Accounting Metrics tutorial teaches decision heuristics through plug and play spreadsheets, and even instructors trained in consumer psychology who have never taken an accounting course and never want to, get this and can administrate it. I will not deny that it took a lot of time and testing to develop very clear spreadsheet tutorials and student instructions. What we do ask the teachers to do is encourage the students to study, and supervise a two-hour certification exam.

A certification exam? What does the exam certify?

It certifies that the student has reached a specified level of competency in understanding marketing accounting concepts, and in using a suite of eight  marketing financial analysis spreadsheets. The tutorial’s publisher authorizes the issue of a certificate to students who pass (score 90% or above in the standardized exam). The certificate is printed and distributed by the course instructor for students to add to their resume support file or display in their work-place. As marketers, we figured we had better provide a strong incentive for effort. You should see the students’ eyes when you pass out the certificate. It’s really cool.

Which raises the question. How have the students and teachers in general responded to this initiative?

Far better than you might think. The initial reaction was mixed, definitely some fear and loathing. Some of the student athletes, fashion majors, or just down-right lazy students who expected the Intro Marketing course to be dead easy were outraged, and did everything possible to sabotage the initiative. But, now all of the students accept it, most have embraced both the content and the methodology, and many give it rave reviews. If they follow the study instructions they do great. If they have a negative attitude, try to short-cut it and don’t study, they do awful. We are happy with this. Most of the instructors support the initiative and are starting to quietly compete  for the highest pass rates. You gotta love it.   

So what is the certification pass rate?

The pass rate has varied from a horrible 15% early on to as high as 65% now in our undergraduate Intro course sections, and 85-100% in our MBA Intro courses. The pass rate is steadily rising and the average grade on the standardized exam, now about 82%, is also rising. We expect that over the next 2-3 years the undergraduate pass rate will climb to about 70% across all of our undergraduate Intro sections and over 90% in our MBA Intro courses. The pass rate seems to depend mostly on having true-believer teachers supporting the students; encouraging them to start studying the tutorial early in the course and not giving the exam at the end of the course, when students are already studying for 4-5 other exams.

For more information on the above tutorial you can contact Peter at dicksonp@fiu.edu. The tutorial and exam is also described at www.marketingaccountingmetrics.c om.

Peter will be the guest speaker at the T&L SIG reception at the AMA Winter Conference in New Orleans, 19-22 February.  He will be giving a talk on the Marketing Accounting Metrics tutorial.

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