University Report: Advertising Strategies and Wal-Mart Profitability

This report, focusing on applied managerial economics, investigates the influence of advertising strategies on Wal-Mart's business profitability. The study employs a mixed-methods approach, combining primary data collection through questionnaires administered to Wal-Mart staff with regression analysis to assess the relationship between advertising programs and sales volume. The research objectives include analyzing the merits and demerits of advertising and their impact on profitability. The findings reveal insights into how advertising affects target market expansion, consumer purchasing attitudes, and product survival. The report concludes with policy implications and recommendations, suggesting amendments to advertising strategies to enhance market reach and customer engagement, ultimately aiming to boost sales and profitability. Appendices include data collection methods and questionnaire responses.

Running head: APPLIED MANAGERIAL ECONOMICS
Applied Managerial Economics
University Name
Student Name
Authors’ Note

2
APPLIED MANAGERIAL ECONOMICS
Table of Contents
Research Objectives...................................................................................................................2
Research Method:.......................................................................................................................2
Data Collection...........................................................................................................................2
Compilation of data....................................................................................................................4
Regression Test..........................................................................................................................4
Data Interpretation.....................................................................................................................5
Policy Implication......................................................................................................................5
Recommendation and conclusion based on the findings of the study.......................................6
References..................................................................................................................................7

3
APPLIED MANAGERIAL ECONOMICS
Effect of advertising strategies on business profitability of business concern: A Study of Wal-
Mart
Research Objectives
The current study intends to analytically examine the extent to which different advertising
programs can affect the overall sales volume and subsequently the profitability of the
company Wal-Mart. In addition to this, the study also aims to critically detect diverse major
merits as well as demerits of advertising and get it know the impact of the same on the overall
business profitability.
Research Method:
The current section presents mechanisms of research method that outlines the mechanisms of
collection of data and interpretation of acquired data to solve the questions at hand. Again,
the questionnaires are also administered to nearly 50 respondents (Hirschey, 2016).
Data Collection
The data required for the present research work is acquired by means of both primary data
sources. Essentially, well-developed questionnaire containing pertinent 11 questions
distributed to members of the staff of the company Wal-Mart. Thus, targeted sample of the
corporation consists of managers, junior and senior staff and head of the department of the
firm. The sample size of the corporation equals to 50 respondents. Essentially, the responses
to all the questions in the questionnaire can be utilized to test the nature of association
between profitability of the organization and advertising programs (McGuigan et al., 2013).

4
APPLIED MANAGERIAL ECONOMICS
Compilation of data
The functions performed from the collected data to deduce information as per prescribed
regulations can be referred to as process of compilation of data. Essentially, the learner
undertakes data compilation in this research study that refers to application of statistical
processes (Png, 2013). The learner uses regression test as the statistical procedure for the
purpose of generation of intermediate data as well as final statistical output.
Regression Test
The learner undertakes a regression analysis in statistical modelling as a statistical procedure
for estimation of the nature of association among specified variables. In this study, the
independent variable of the study is the advertising stratagems and the dependent variable is
the profitability of the corporation (Bernanke et al., 2015). Again, the learner uses a variable
that can be utilized to predict values of different other variable known as the independent
variable.
The first table of the regression analysis is the summary output. This includes multiple R, R
Square, Adjusted R Square, Standard Error and the number of observations (Panneerselvam,
2014). In this case, the R value reflects the nature of correlation and is observed to be 0.83
and this indicates a higher degree of correlation. Furthermore, the R Square reflects the extent
to which the total variation in identified variable. For the present study, it is calculated to be
0.69 and this is also moderately high (Froeb et al., 2015).
The second table of the regression test used in this research is the ANOVA for the study. This
indicates the extent to which the regression equation can particularly fit the acquired data that
predicts/estimates the dependent variable. Essentially, this second table also refers to the fact
that regression model also predicts/forecasts the dependent variable considerably well.

5
APPLIED MANAGERIAL ECONOMICS
Particularly, statistical significance of this particular regression model is mainly run for the
present study (Panneerselvam, 2014). In this case, p value that is lesser than 0.05 and reflects
that in all the regression model can considerably predict the outcome variable. Thus, it can be
said that it is necessarily a good fit (Evans, 2014).
Thereafter, the regression test contains the coefficient table that presents the requisite
information to forecast profitability from the advertising strategies (Flick, 2015). In essence,
this can help in determining whether profitability can effectively contribute significantly
towards the model.
Data Interpretation
The findings of the study indicate towards regression analysis that essentially generates a
specific equation for describing the particular statistical association between one or more than
one predictor variable as well as response variable. In this case, the p-value for each and
every term helps in testing the terms. Essentially, a larger p value suggests that alterations in
primarily the predictor are not related to changes in the responses (Panneerselvam, 2014). As
per the output obtained, it can be said that p value for “target market” is 0.56 that is greater
than 0.05. This indicates that it is necessarily not statistically significant. However, for the
term advertising affecting “purchasing attitude”, it is enumerated to be 0.030, therefore, can
be said to be significant. Again, advertising “Inspiring large number of audiences” is 0.89 and
is said to be insignificant. Similarly, advertising affecting “survival of product” is said to
have insignificant effect as the p value of 0.29 that is greater than 0.05. Nevertheless,
justification of existence is significant as p value is 0.001 and is said to be greater than 0.05.

6
APPLIED MANAGERIAL ECONOMICS
Policy Implication
Based on the findings of the study it can be hereby mentioned that there are 22 females
among the 50 respondents. Again, 8 respondents are over and above the age 46 years and
above, 25 respondents of the age 25 years and 35 years, whereas 17 respondents of the age
are in the group 18 years to 25 years. In addition to this, 25 respondents belong to the
designation junior and senior members of the staff of the company Wal-Mart, while 17 are
head of the department and 9 are managers. Again, only 16 respondents are post graduate,
while 23 respondents are graduates and 11 have educational qualification of higher secondary
level. As per the results of the study it can be stated that advertising strategy of the firm fails
to expand the overall target market of the firm as they are weakly related (Hirschey, 2016).
Again, as per the views of the respondents, the advertising strategy and programs of the firm
Wal-Mart also fails to inspire large number of audiences and affect survival of Wal-Mart’s
products. It is evident from the statistical insignificance reflected in the coefficient table of
the regression test run for the study.
Recommendation and conclusion based on the findings of the study
In conclusion, policies of the firm as regards advertising can be amended and designed for
expansion of target market as both have significant association as per results of the study. The
advertising programs also have the need to be more attractive for attracting larger number of
customers that in turn can boost sales and profitability. Again, analysis of the study also helps
in understanding the fact advertising strategies also assists in comprehending the fact that
advertising strategies also affects justification of existence, therefore need to be properly
formulated for better operations and subsequently higher profitability of Wal-Mart.

7
APPLIED MANAGERIAL ECONOMICS
References
Bernanke, B., Antonovics, K., & Frank, R. (2015). Principles of macroeconomics. McGraw-
Hill Higher Education.
Evans, A. J. (2014). Markets for Managers: A Managerial Economics Primer. John Wiley &
Sons.
Flick, U. (2015). Introducing research methodology: A beginner's guide to doing a research
project. Sage.
Froeb, L. M., McCann, B. T., Ward, M. R., & Shor, M. (2015). Managerial Economics.
Cengage learning.
Hirschey, M. (2016). Managerial economics. Cengage Learning.
McGuigan, J., Moyer, R. C., & Harris, F. (2013). Managerial economics: applications,
strategies and tactics. Nelson Education.
Panneerselvam, R. (2014). Research methodology. PHI Learning Pvt. Ltd..
Png, I. (2013). Managerial economics. Routledge.
Appendices:
Data Collection through collection of feedback from the distributed questionnaire:
Question 1: Gender

8
APPLIED MANAGERIAL ECONOMICS
Variable
Male
Female
Total
Question 2: Age
Variable
18-25
25-35
46 -above
Total
Question 3: Educational Qualification
Variable
Higher Secondary Level
Graduate
Post Graduate
Total
Question 4: Designation
Variable
Manager
Head of each Department
Junior and Senior Staff

9
APPLIED MANAGERIAL ECONOMICS
Total

10
APPLIED MANAGERIAL ECONOMICS
Question 5: Work Experience
Variable
1-5 years
5-10 years
10 and above
Total
Table Showing Degree of Response
Question 6: Advertising will necessarily enhance the overall target market of Wal-Mart and
boost firm’s sales
Variable
Strongly Agree
Agree
Not Decided
Strongly Disagree
Disagree
Total
Question 7: Consistent advertisement can influence the purchasing attitude of the consumers
Variable
Strongly Agree
Agree
Not Decided
Strongly Disagree