Advertising Intensity and R&D Intensity: Differences across Industries and Their Impact on Firm's Performance
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.
Volume (Year): 2 (2003)
Issue (Month): 2 (August)
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- GrahamJr., Roger C. & Frankenberger, Kristina D., 2000. "The Contribution of Changes in Advertising Expenditures to Earnings and Market Values," Journal of Business Research, Elsevier, vol. 50(2), pages 149-155, November.
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- Michael E. Porter, 1992. "Capital Choices: Changing The Way America Invests In Industry," Journal of Applied Corporate Finance, Morgan Stanley, vol. 5(2), pages 4-16.
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