The Effect of Marketing Spending on Sales in the Premium Car Segment: New Evidence from Germany
AbstractThis 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.
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Bibliographic InfoPaper provided by University of Salzburg in its series Working Papers in Economics and Finance with number 2012-2.
Length: 26 pages
Date of creation: 14 Feb 2012
Date of revision:
Marketing expenditure; panel data models; automobile industry; premium car segment; automotive restyling;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
- NEP-BEC-2012-02-20 (Business Economics)
- NEP-MKT-2012-02-20 (Marketing)
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