Advertising Intensity and R&D Intensity: Differences across Industries and Their Impact on Firm's Performance

Trina Larsen Andras and Srini S. Srinivasan
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Trina Larsen Andras: Department of Marketing, Drexel University, U.S.A.
Srini S. Srinivasan: Department of Marketing, Drexel University, U.S.A.

International Journal of Business and Economics, 2003, vol. 2, issue 2, 167-176

Abstract: To compete successfully in the market place, organizations optimally utilize their inputs and benchmark their key inputs and outputs against other successful firms. Two of the key inputs that organizations should effectively manage are marketing expenses and R&D expenses. In this research, we investigate a) if these two inputs systematically vary across consumer product and manufacturing product organizations, and b) if these two factors have an impact on firm's performance. We find that consumer product organizations have higher advertising intensity than manufacturing product organizations. However, manufacturing product organizations have higher R&D intensity than consumer product organizations. Findings of this research also reveal that advertising intensity and R&D intensity are positively related to firm profit margins.

Keywords: marketing expenditures; R&D expenditures; firm's performance (search for similar items in EconPapers)
JEL-codes: M30 M31 M37 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (22)

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