Advertising and sales promotion have significant impact on raising customer awareness. They are tools by which customers become acquainted with new and innovative products and services of the companies. Despite the im...Advertising and sales promotion have significant impact on raising customer awareness. They are tools by which customers become acquainted with new and innovative products and services of the companies. Despite the importance of these tools in increasing sales, it is not easy to evaluate their effect on sales. One of the problems confronted by the marketing managers is the determination of a clear relationship between the effectiveness of advertising and sales promotion on profitability. In this article, considering the relationship between these tools and brand equity, we have attempted to determine the relationship between effectiveness of these two factors and profitability. Next, a system dynamics model for representing the effects of marketing communication tools on company profitability is offered. Finally, using the data from a corporation and the numeric values related to each of the elements in the model, an attempt has been made to determine a number representing the magnitude of the effect of advertising and sales promotion on the corporation＇s revenue and profitability and to draw the respective curves related to the effects of these two factors.展开更多
文摘Advertising and sales promotion have significant impact on raising customer awareness. They are tools by which customers become acquainted with new and innovative products and services of the companies. Despite the importance of these tools in increasing sales, it is not easy to evaluate their effect on sales. One of the problems confronted by the marketing managers is the determination of a clear relationship between the effectiveness of advertising and sales promotion on profitability. In this article, considering the relationship between these tools and brand equity, we have attempted to determine the relationship between effectiveness of these two factors and profitability. Next, a system dynamics model for representing the effects of marketing communication tools on company profitability is offered. Finally, using the data from a corporation and the numeric values related to each of the elements in the model, an attempt has been made to determine a number representing the magnitude of the effect of advertising and sales promotion on the corporation＇s revenue and profitability and to draw the respective curves related to the effects of these two factors.
