Effects of Marketing Activities on Financial Performance: An Empirical Analysis

Corporations exercise various marketing strategies in order to be competitive and profitable by attracting both new and existing customers. Although corporations’ marketing costs continue to increase, it is difficult to measure the causal relationship between marketing efforts and financial performance.This study analyzes the marketing cost factors that affect financial performances for consumption and production goods industries with external factors controlled for. Authors report evidence that the effectiveness of marketing expenses depends on the industry, based on the three indicators (total return growth / marketing cost growth, total return growth / current marketing cost, and gross profit growth / marketing cost growth).This paper provides the baseline data that practitioners can utilize to differentiate marketing strategies, reduce excessive marketing competition and enhance cost effectiveness