Impact of advertisement expenditure on firm’s performance: as evidenced from selected service firms listed on the Ghana Stock Exchange.
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Date
NOVEMBER, 2015.
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Abstract
The ever-growing competition in today’s business environment creates dynamic challenges to
firms. Today, advertisements are going international at a much faster speed leading to a universal
response to advertisement, the forms of advertisement are changing to include electronic
advertisement and mobile advertisement to the overall advertisement portfolio of firms. This
leads to changes in the costing patterns of advertisement which could lead to a fall in firms’
performance.
This thesis examines empirically the effect of advertisement expenditure on the banking firms’
performance in Ghana.
Taking data from five commercial banks listed on the Ghana Stock Exchange from 2007 to
2013, sampled out of a possible nine commercial banks listed on the Ghana stock exchange due
to the availability of data for the given period, it is shown after data analysis from the five
sampled banks that the impact of advertisement expenditure on sales is positive and significant
while it has adverse significant effect on return on equity.
The study posits that, advertisement intensity has negative and significant effect on profitability.
Hence, the study reasons that advertisement expenditure does not cause return on equity to
increase as a measure of performance. There is therefore no value added to the shareholders
wealth as managers spend on advertisement to promote the banks. It is therefore recommended
that firms with low margins might need dissimilar planned marketing mixes than high-margin
firms.
Description
A thesis submitted to the Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the award of Master of Business Administration in Strategic Management and Consulting.