Impact of advertising and sales promotion expenses on the sales performance of Jordanian companies: The moderating role of firm size
-
Received June 17, 2024;Accepted October 7, 2024;Published December 4, 2024
-
Author(s)Link to ORCID Index: https://orcid.org/0000-0001-7389-2108Link to ORCID Index: https://orcid.org/0000-0001-7166-0063Link to ORCID Index: https://orcid.org/0000-0003-1030-1889Link to ORCID Index: https://orcid.org/0000-0002-3928-7497Link to ORCID Index: https://orcid.org/0000-0002-6333-8784
-
DOIhttp://dx.doi.org/10.21511/im.20(4).2024.13
-
Article InfoVolume 20 2024, Issue #4, pp. 146-157
- TO CITE АНОТАЦІЯ
- 94 Views
-
29 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study aimed at analyzing the effect of sales promotion and advertising expenses on sales performance, considering firm size as a likely moderating variable.
This research conducted regression analyses on 474 Jordanian companies based on the firm’s advertising expenditure, gross margin, firm size, and sales performance. It tested two models: first, direct impact of advertising expenses on sales performance, and, second, firm size affecting the relationship between advertising expenses and sales performance.
The findings show that advertising and sales promotion expenses do not have a significant effect on sales performance. Besides, firm size did not moderate this relationship, as referred by a non-significant t-value of –1.459 and a p-value of 0.145. The models explained only 4.1% and 0.5% of the variance in sales performance, respectively, suggesting that other factors play a more significant role.
These results suggest that Jordanian firms have to reevaluate their advertising strategies and consider alternative approaches to enhance sales. The research contributes to more understanding of the limited role of advertising in sales performance within the Jordanian market.
Acknowledgement
This research was funded through the annual funding track by the Deanship of Scientific Research, from the vice presidency for graduate studies and scientific research, King Faisal University, Saudi Arabia [Grant no. KFU242402].
- Keywords
-
JEL Classification (Paper profile tab)M37, L25, M31, L11
-
References43
-
Tables4
-
Figures0
-
- Table 1. Descriptive statistics
- Table 2. Pearson correlation matrix
- Table 3. The first model
- Table 4. The second model
-
- Ailawadi, K. L., Beauchamp, J. P., Donthu, N., Gauri, D. K., & Shankar, V. (2009). Communication and promotion decisions in retailing: a review and directions for future research. Journal of Retailing, 85(1), 42-55.
- Alareeni, B. A., & Hamdan, A. (2020). ESG impact on performance of US S&P 500-listed firms. Corporate Governance, 20(7), 1409-1428.
- Arif, A. M., & Hashim, H. A. (2014). Governance and the value relevance of tax avoidance. Malaysian Accounting Review, 13(2), 87-107.
- Ariffin, Z. Z. (2013). Tax planning of a company operating foreign activity in Malaysia. International Journal of Trade, Economics and Finance, 4(4), 209-212.
- Bagwell, K. (2007). The economic analysis of advertising. Handbook of Industrial Organization, 3, 1701-1844.
- Bosch, J., Blandon, J., Ravenda, D., Silva, M., & Somozo A. (2017). The influence of the trade-off between profitability and future increases in sales on cost stickiness. Estudios de Economía [Economic Studies], 44(1), 81-104.
- Bui, C., Scheule, H., & Wu, E. (2020). A cautionary tale of two extremes: The provision of government liquidity support in the banking sector. Journal of Financial Stability, 51, 1-22.
- Chen, X., Hu, N., Wang, X., & Tang, X. (2014). Tax avoidance and firm value: Evidence from China. Nankai Business Review International, 5(1), 25-42.
- Dahmash, F. N. (2015). Size effect on company profitability: Evidence from Jordan. International Journal of Business and Management, 10(2), 58-72.
- Chandy, R. K., Tellis, G. J., MacInnis, D. J., & Thaivanich, P. (2001). What to say when: Advertising appeals in evolving markets. Journal of Marketing Research, 38(4), 399-414.
- Day, G. S. (2011). Closing the marketing capabilities gap. Journal of Marketing, 75(4), 183-195.
- Desai, M. A., & Dharmapala, D. (2006). Corporate tax avoidance and high-powered incentives. Journal of Financial Economics, 79(1), 145-179.
- Gavalas, D., & Syriopoulos, T. (2019). How sticky are the costs? Evidence from the shipping industry. International Journal of Accounting and Finance Studies, 2(1), 1-16.
- Grossmann, M., & Hottiger, D. (2020). Liquidity constraints and the formation of unbalanced contests. International Journal of Industrial Organization, 73.
- Han, M., Li, Y., Wang, N., & Zhang, H. (2020). Cultural diversity in ownership and stock liquidity. Applied Economics Letters, 27(21), 1772-1777.
- Hepola, J., Karjaluoto, H., & Hintikka, A. (2017). The effect of sensory brand experience and involvement on brand equity directly and indirectly through consumer brand engagement. Journal of Product & Brand Management, 26(3), 282-293.
- Lane Keller, K. (2013). Strategic Brand Management: Building, Measuring, and Managing Brand Equity. Pearson Education Limited.
- Li, L., Mei, D., & Li, R. (2020). The impact of RMB swap agreements on foreign exchange reserve demand. Applied Economics, 52(59), 6453-6467.
- Lim, H., & Rokhim, R. (2021). Factors affecting profitability of pharmaceutical company: An Indonesian evidence. Journal of Economic Studies, 48(5), 981-995.
- Mansour, M., Al Zobi, M., Abu alim, S., Saleh, M. W. A., Marashdeh, Z., Marei, A., Alkhodary, D., Al-Nohood, S., & Lutfi, A. (2024). Eco-innovation and financial performance nexus: Does company size matter? Journal of Open Innovation: Technology, Market, and Complexity, 10(1).
- Mansour, M., Al Zobi, Saram, M., Daoud, L., & Marei, A. (2023). Does executive compensation matter to bank performance? Experimental evidence from Jordan. Banks and Bank Systems, 18(3), 164-176.
- Moorman, C., & Slotegraaf, R. J. (1999). The contingency value of complementary capabilities in product development. Journal of Marketing Research, 36(2), 239-257.
- Pauwels, K., Silva-Risso, J., Srinivasan, S., & Hanssens, D. M. (2004). New products, sales promotions, and firm value: The case of the automobile industry. Journal of Marketing, 68(4), 142-156.
- Saini, R. D., & Sharma, P. (2009). Liquidity, risk and profitability analysis: A case study of steel authority of India limited. ASBM Journal of Management, 2(2), 64-75.
- Salihu, I. A., Obid, S. N. S., & Annuar, H. A. (2014). Government ownership and corporate tax avoidance: Empirical evidence from Malaysia. In Handbook on the emerging trends in scientific research (pp. 673-688). PAK Publishing Group.
- Shamma, H. M., & Hassan, S. S. (2009). Customer and non-customer perspectives for examining corporate reputation. Journal of Product & Brand Management, 18(5), 326-337.
- Shubita, M. (2024). The relationship between sales growth, profitability, and tax avoidance. Innovative Marketing, 20(1), 113-121.
- Shubita, M. (2023). The relationship between return on investment and Jordanian banks value. Banks and Bank Systems, 18(1), 139- 149.
- Shubita, Mohammad (2022). Intellectual capital and industrial firms’ growth: Evidence from Jordanian manufacturing listed firms. Problems and Perspectives in Management, 20(3), 325-334.
- Shubita, M. (2021). The ability of cash flows to predict the earning: Evidence from Jordan. Investment Management and Financial Innovations, 18(4), 36-44.
- Slemrod, J. (2004). Are corporate tax rates, or countries, converging? Journal of Public Economics, 88(6), 1169-1186.
- Srinivasan, S., Pauwels, K., Silva-Risso, J., & Hanssens, D. M. (2009). Product innovations, advertising, and stock returns. Journal of Marketing, 73(1), 24-43.
- Tiago, M. T. P. M. B., & Veríssimo, J. M. C. (2014). Digital marketing and social media: Why bother? Business horizons, 57(6), 703-708.
- Toker-Yildiz, K., Trivedi, M., Choi, J., & Chang, S. R. (2017). Social interactions and monetary incentives in driving consumer repeat behavior. Journal of Marketing Research, 54(3), 364-380.
- Rezaei, F., & Ghanaeenejad, M. (2014). A review on transparency in financial reporting and its effects on tax avoidance and firm value. Journal of Commerce and Accounting Research, 3(2), 8-21.
- Salahaldin, A. D., & Atua, T. T. (2022). Marketing in Higher Education and its Role in Enhancing the World Ranking of Universities: An Exploratory Study in Iraqi Private Universities and Colleges. Revista iberoamericana de psicología del ejercicio y el deporte [Ibero-American Journal of Exercise and Sport Psychology], 17(6), 424-431.
- Salahaldin, A. D., & Hussein, M. A. (2022). Nostalgia Marketing as an Effective Mechanism for Maximizing Brand Value: Field research for LC Waikiki Fashion Stores Group in Iraq. International Journal of Professional Business Review, 7(5), 26.
- Srayyih, F. H., & Al-Rawi, U. M. T. (2021). The effect of financial sustainability on market value–A study in a sample of firms listed in Iraq’s securities market. Rigeo, 11(5), 4679-4690.
- Subramaniam, C., & Watson, M. W. (2016). Additional evidence on the sticky behavior of cost. In Advances in Management Accounting (pp. 275-305). Bingley: Emerald Group Publishing Limited.
- Tellis, G. J. (2009). Generalizations about advertising effectiveness in markets. Journal of Advertising Research, 49(2), 240-245.
- Wang, Y.-J. (2002). Liquidity management, operating performance, and corporate value: Evidence from Japan and Taiwan. Journal of Multinational Financial Management, 12(2), 159-169.
- Wijaya, C., Lucianna, Y., & Indriati, F. (2020). Determinants of interest rate spreads of conventional banks listed on the Indonesia Stock Exchange. Banks and Bank Systems, 15(4), 69-79.
- Zimmerman, J. L. (1983). Taxes and firm size. Journal of Accounting and Economics, 5, 119-149.
-
-
Conceptualization
Mohammad Fawzi Shubita
-
Investigation
Mohammad Fawzi Shubita
-
Methodology
Mohammad Fawzi Shubita
-
Resources
Mohammad Fawzi Shubita, Marwan Mansour, Mohammed W.A. Saleh, Abdalwali Lutfi, Mohamed Saad, Dua’a Shubita
-
Supervision
Mohammad Fawzi Shubita, Marwan Mansour, Mohammed W.A. Saleh, Abdalwali Lutfi, Mohamed Saad, Dua’a Shubita
-
Writing – original draft
Mohammad Fawzi Shubita, Dua’a Shubita
-
Writing – review & editing
Mohammad Fawzi Shubita, Marwan Mansour, Mohammed W.A. Saleh, Abdalwali Lutfi, Mohamed Saad
-
Funding acquisition
Marwan Mansour, Mohammed W.A. Saleh, Abdalwali Lutfi, Mohamed Saad, Dua’a Shubita
-
Conceptualization
-
The resource-based view: a tool of key competency for competitive advantage
Problems and Perspectives in Management Volume 17, 2019 Issue #3 pp. 143-152 Views: 4822 Downloads: 1108 TO CITE АНОТАЦІЯThe increasing turmoil in the external organizational setting or business environment has focused attention on capabilities and resources as the primary source of competitive advantage. Obviously, this statement points to the application of the resource-based view (RBV) of organizational management. Nevertheless, what constitutes RBV remains an illusion in many quarters of organizational management, as scholars have managed to put up their personal ideas, and managed to converge on phenomenon-driven theories, in addition to RBV. This paper reviews the concepts of RBV in light of knowledge management to highlight some critical pitfalls that might have eluded the research community on the subject matter of RBV. To this end, this paper’s educational value lies in the fact that it simplifies the concept of RBV to the new researcher in a fashion that is capable of appealing to his or her level. A cross-sectional qualitative research approach was employed in an effort aimed at understanding the role of RBV in creating a sustainable competitive advantage and key competencies. A total of 20 relevant articles were searched from different databases and search engines, including Scopus, EBSCO, ABI Inform, IEEE, PubMed, Science Direct, SABINET, IEEE, Bing, Science Direct, and Google Scholar. The findings indicate that RBV plays an important role and assists organizations not only create, nurture, and maintain competitive advantage, but also understand the collective resources needed to compete favorably in a globalized and highly competitive market. With expert knowledge workers at its core to provide support for knowledge creation, sharing, and utilization, the RBV principles discussed in this paper promise to guarantee a methodological step geared towards the achievement of competitive advantage. It, therefore, makes an incremental contribution to the RBV to attain modest improvement in organizational settings.
-
The impact of strategic human resources planning on the organizational performance of public shareholding companies in Jordan
Shaker Al-Qudah , Abdallah Mishael Obeidat , Hosam Shrouf , Mohammed A. Abusweilem doi: http://dx.doi.org/10.21511/ppm.18(1).2020.19Problems and Perspectives in Management Volume 18, 2020 Issue #1 pp. 219-230 Views: 3302 Downloads: 3327 TO CITE АНОТАЦІЯPerformance management (PM) is a common practice used by organizations to assess and manage employees’ work. Much of PM research is closely related to management practices. Corporations in the public and nonprofit sector continuously develop PM programs to ensure the sustainability of their organizations.
The study aims to analyze the impact of strategic human resources planning on the organizational performance of Jordanian public shareholding companies for senior management and functional unit managers (human resources, marketing, finance, and accounting). The researchers surveyed all the public shareholding companies registered with the Jordan Securities Commission (JSC) in 2019, wherein they found that only 60 companies applied strategic planning and human resources planning (HRP) together. Two hundred and twenty questionnaires were distributed in 52 companies surveyed, and 203 were adopted for statistical analysis. Several statistical methods were used, most notably the multiple regression analysis. The researchers found out a statistically significant impact of the strategic human resources planning (integration of HRP and strategic planning; strategic participation) on organizational performance. The results showed that adopting the strategic HRP dimensions leads to an increase in an organization’s overall productivity, employee satisfaction and reputation, as well as reduced operating costs. HR managers must understand the effectiveness of strategically designed HR practices across functions. -
Life insurance companies marketing strategy in the digital world
Insurance Markets and Companies Volume 9, 2018 Issue #1 pp. 70-78 Views: 3210 Downloads: 883 TO CITE АНОТАЦІЯThe research is aimed to evaluate the internet marketing strategies in of life insurance companies in Ukraine. The insurance service in the time of digitalization faces scenarios of implementation in the marketing strategy on-line component. The main challenge for Ukrainian life insurance companies comparatively with the world practice is non-obligatory status of such kind of insurance contracts. So, on the one hand, costs of operation, regulatory pressures and inflexible technology infrastructure are increasing, and, on the other hand, economic recession does not allow to increase the number of insured persons, premiums and profit growth.
Sector of financial services is characterized by an increase in the level of competition, life insurance compelled to compete with pensions funds, banks and other financial institutions in order to defend their market share. Insurance companies marketing strategy determines how an insurer can best achieve its goals and objectives, keep existing customers and attract new ones with minimal costs.
Keeping all the above problems around the study would attempt to study all the factors that contributed to the effective marketing strategies. This paper presents different marketing strategies that are taken up in life insurance services keeping in view external and internal environment of the company.