Assessment of the Effects of Advertising on Increasing Sales and a Mathematical Model for Determination of this Impact on Profitability

Subject Areas : Jounal of Marketing Management

A. A.  Farhangi ¹ (استاد، عضو هیئت علمی دانشکده مدیریت دانشگاه تهران)
A.  Ekhlasi ² (دانشجوی دکتری مدیریت بازاریابی، دانشکده مدیریت دانشگاه تهران)
P.  Toluei ³ (دانشجوی کارشناسی ارشد MBA، دانشکده مدیریت دانشگاه تهران)

Received: 2014-06-11 Accepted : 2014-06-11 Published : 2009-03-21

Keywords: Advertising, Brand Equity, Profitability, Sales promotion,

Abstract :

Advertising has a significant impact on raising customer awareness. It is a tool by which customers become acquainted with companies` new and innovative products and services. Despite the importance of this tool in increasing sales, it is not easy to evaluate its effect on sales. One problem confronted by marketing managers is determination of a clear relationship between the effectiveness of advertising and profitability. In this article, considering the relationship between these tools and brand equity, we have attempted to determine the effectiveness of these two factors on profitability. Also, different models for representing the effects of marketing communication tools on company profitability are offered. Finally, using data from a corporation and the numeric values related to each of the elements in the model, we attempt to determine a number representing the magnitude of the effect of advertising and sales promotion on the corporation's revenue.