Title page for ETD etd-05152011-140602

Document Type Master's Dissertation
Author Mbokodo, Oupa
URN etd-05152011-140602
Document Title Customer equity as a firmís valuation technique
Degree MBA
Department Gordon Institute of Business Science
Advisor Name Title
Dr D Kartte Supervisor
  • enterprise value
  • discounted cash flow
  • customer equity
Date 2010-11-10
Availability unrestricted

Return on marketing investment has received attention for a long period of time. On the other hand, customers and the value that they bring to a company have enjoyed increased attention lately. Concepts like customer obsession, customer life time value, customer delight, customer equity and other topics have been researched by a number of scholars.

Customer equity as a marketing concept is the latest in marketing research. The concepts purport that management of a company should be able to calculate the value added to the company by its current and future customers. Such value is then discounted using the appropriate discount rate i.e. weighted average cost of capital (WACC).

This research focused on the possibility of using Customer Equity to calculate enterprise value. The purpose was to determine whether any variance between results of the two methods is statistically significant and whether or not a relationship between CE based enterprise value and discounted cash flow (DCF) based enterprise value exist.

From the analysis conducted it was concluded that no statistically significant variance existed between Customer Equity based enterprise value and DCF enterprise value. It was also noted that a relationship exist between customer equity and an enterprise value calculated using the DCF model.

Copyright © 2010, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria

Please cite as follows:

Mbokodo, O 2010, Customer equity as a firmís valuation technique, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-05152011-140602/>


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