Open AccessEffect of Advertising Expenses and Sales Incentives on Financial Performance: Dissecting the Cases of Two Market Leaders
Author(s) -
Madhobi Hossain,
Tiasha Islam
Publication year - 2018
Publication title -
business and economic research
Language(s) - English
Resource type - Journals
ISSN - 2162-4860
DOI - 10.5296/ber.v9i1.14019
Subject(s) - revenue , incentive , profit (economics) , business , net profit , recession , marketing , sales management , gross profit , finance , economics , microeconomics , keynesian economics
There has been much interest among academicians and practitioners to understand the role of marketing expenses in contributing to the financial performance of organizations. Especially, in times of recession, budget reduction, or market contraction, marketing budgets get the major cut. However, organizations continue to spend millions in the development and execution of marketing programs. This paper examines the effect of advertising and sales incentives on the revenue and profit of Grameenphone and bKash, who are the market leaders in their respective industries of Bangladesh. With the help of secondary data, it has been found that there is a negative relationship between advertising and financial performance (i.e. revenue and profit), but sales incentives on the other hand have a positive relationship with revenue and profit.