The Effect of Marketing Spending on Sales in the Premium Car Segment: New Evidence from Germany

Jesus Crespo Cuaresma and Matthias Stöckl ()
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Matthias Stöckl: University of Salzburg

No 2012-2, Working Papers in Economics from University of Salzburg

Abstract: This paper assesses empirically the relationship between marketing expenditures and sales in the premium car segment in Germany. We employ a new data-set which contains model-specific data on sales (i.e. registrations), restyling activities and marketing expenditures at a monthly basis for the years 1998 to 2007. The richness of our data in the time dimension allows for a systematic modeling of product life cycle effects which have been partly ignored in the existing empirical literature. We find a robust positive marketing-sales relationship, even after common characteristics of the product life cycle have been taken into account. Furthermore, our results indicate that the launching of a new model, face lifts and customized packages appear to exert a positive and sizeable effect on sales in the German premium car segment.

Keywords: Marketing expenditure; panel data models; automobile industry; premium car segment; automotive restyling (search for similar items in EconPapers)
JEL-codes: D43 M31 M37 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012-02-14
New Economics Papers: this item is included in nep-bec and nep-mkt
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