The article entitled “The Impact of Marketing Variables on Business Performance: An Analysis of FMCG, Consumer Durables and Textile Industries” written by Sweta Singh examines the different effects marketing expenditures will have in three different industries. Closely analyzed was the FMCG, consumer durables, and textile industries in India. Primarily discussed were the rapid changes in marketing that has occurred over the past 20 years as well as the increased competition emerging from each sector. Singh states in the article “increased competition from every corner of the world has forced the companies to bring changes in their strategy regarding marketing, operations and human resources so that they can sustain the competition.” Through reading the article, one is able to identify the clear difference in marketing nowadays and the prominent effects it has on market share.
In 2001, the Marketing Leadership Council reported that 70% of advertising budgets were declining compared to 51% of human resources and 47% of information technology. This decline was creating confusion and deterring marketers from easily identifying and justifying the returns on their investments. According to Advertising Age (2005), more than $245 billion was spent exclusively on marketing in the US during 2003. Unfortunately, this substantial amount of money did not have a direct link to increasing sales and/or shareholder values.
In 1996, a study was conducted by Stewart on the Canadian automobile market that used three variables to try and explain variation ratios between expenditures and sales. Dekimpe and Hanssens (1995) found that marketing efforts affect the long-term marketing trends in sales. In the article, multiple studies are mentioned that all show a correlation between marketing trends and sales both in the long term and the short term. However, notably, marketing affects sales more significantly in the short term than it does in the long term.
It is clear through explanations and studies in the article that marketing is important in supporting products and certain firms. Based on Kuvykaite's study published in 2009, packaging plays a prominent role in how successful a product will be when it is brought to maturity. In conclusion, it is clear that there is a positive correlation between marketing expenditure and sales.
Topics of Interest/ Agreement
I strongly agree that the study conducted by Kuvykaite in 2009 is true and that packaging does perform an important role in the point of sale for a product. Packaging is the first visual thing a person sees prior to purchasing a product and therefore good packaging can attract or deter a customer. An attractive package whether it be colorful or have warm colors will always attract someone's eyes more than a bland package that does not stand out.
Secondly, I agree that marketing and sales have a positive correlation. Although sometimes a company could waste too much money on marketing, the more that a company promotes their product or service, the more likely it is that they will be noticed and draw attention to themselves. The saying “there's no such thing as bad publicity” is comparable to the correlation between marketing and sales because even with poor marketing, a company's name will still be mentioned and put in people's mind which in turn could trigger potential sales.
Topics of Dislike/ Disagreement
I was surprised by the study that showed marketing and advertising expenditures did not impact the textile industry and did not agree with that conclusion. I believe that the textile industry is very popular because many manufacturers require textiles to produce their products. Although they may not require advertising on billboards, they still need to advertise to make their products known so that their customers purchase from them and not their competitors. With the number of producers of textiles, I would assume that marketing expenditures would need to be higher in this industry in order to create effectiveness. Overall, this one the only part of the article that I really disagreed with.
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