Analyzing Dynamic Effects of Advertising: A Marketing Case Study

This report analyzes a case study titled "Measuring dynamic effects of advertising: a case study in India," which examines the impact of marketing mix variables on sales, focusing on both short-term and long-term effects. The study uses time-series data and regression models to assess the relative contributions of marketing mix variables and the influence of advertising on revenue. The analysis includes hypothesis testing, evaluating alternatives, and selecting preferred strategies based on the findings. The report concludes that marketing mix variables, especially advertising, have a significant positive impact on sales, with short-term effects being more pronounced. The study highlights the importance of strategically managing marketing mix variables to boost sales, particularly within a short-term timeframe. The report also discusses the limitations of the study and suggests avenues for future research, such as analyzing multiple brands and product classes to gain a deeper understanding of advertising's impact on business revenue.

PRINCIPLES OF MARKETING
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Table of Contents
Introduction...................................................................................................................3
Defining the issue(s).....................................................................................................3
Analyzing the case data...............................................................................................3
Generating alternatives................................................................................................4
Selecting decision criteria.............................................................................................4
Analyzing and evaluating alternatives..........................................................................5
Selecting the preferred alternative...............................................................................5
Developing an action/implementation plan...................................................................6
Conclusion....................................................................................................................6
References...................................................................................................................8
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Introduction
The concept of the marketing mix has been an effective and a Critical Success
Factor (CSF) in a business context. The given paper analyses journal titled
“Measuring dynamic effects of advertising: a case study in India” written by
Mehir Baidya, Bipasha Maity and Kamal Ghose.
Defining the issue(s)
The issue here revolves around the study of relative implication marketing mix
variables may have on revenue and both short term and long-term goals of a
business. The study has been conducted considering Indian context (Baidya, Maity
& Ghose, 2012).
Analyzing the case data
For an aforesaid research paper, time-series data of two identified brands have been
gathered on sales and marketing mix variables. Thereafter, quantitative analysis is
being performed to identify any correlation between advertising data and sales data.
Also, the mathematical model has been fitted on sales and advertising data to
assess the impact on short term and long-term effects of advertising on the
business. In analyzing the case data, two research questions have been formulated
which are as below:
 What are the relative contributions of marketing mix variables to sales?
 What are the degree of short term and long-term effect of advertising on
adjusted sales?
To answer these two research questions, necessary initiatives have been
undertaken through quantitative analysis and thereby conclusion has been drawn.
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Generating alternatives
For a given analysis, hypotheses may need to be formulated. In this context, it may
be noted that it is often been observed that marketing effort may have had an impact
on business revenue (Yusi & Idris, 2018). The contribution of each of the marketing
variables on the top line of the business may have not been researched to a great
extent and here forms the primary originality and significance of the paper as well.
On the other hand, the short-term and long-term effect of such marketing mix
variables may be a point of consideration for the management if looked at from a
given period horizon (Bhargav, 2017). Considering the same, three hypotheses have
been formed as below:
 Hypothesis 1 - The first hypothesis suggests that marketing effort may have a
positive influence on sales and their respective contribution to business
revenue will be different from each other
 Hypothesis 2 – The second hypothesis talks about the short term and long-
term effect of marketing and advertising on adjusted sales. This hypothesis
suggests that advertising expenses incurred in the present period may have a
positive influence on sales in the current period only
 Hypothesis 3 – The hypothesis says that the advertising expenses incurred in
previous periods may have a positive influence on sales in the current period
only.
These are the alternatives which have been tested against time series and double-
log regression model to answer research questions and thereby arrive at a
conclusion.
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Selecting decision criteria
In undertaking such analysis, it has been noted that hypothesis testing will be the
primary objective in the analysis as mentioned in the given case study. The test of
the hypothesis will be the principal effort that researchers have placed to arrive at the
answers to research questions so formulated. If the hypotheses are found to be true
then it may be conceived that the research objectives are being met. To be more
precise, the decision criteria would be as follows:
 If hypothesis 1 is being met – The researchers will construe that there
remains a relationship between advertising and business revenue especially
with respect to marketing mix variables
 If hypothesis 2 is being met – The researchers will conceive that advertising
expenses have a short-term effect on adjusted sales
 If hypothesis 3 is being met – The researchers will draw a conclusion that
advertising expenses may have a long-term effect on adjusted sales.
Analyzing and evaluating alternatives
The quantitative analysis has been carried out in the intended research paper using
a double-log regression model. The regression analysis has been applied to 22
sample observation for the first brand and 21 observations for the second brand.
These 33 samples have been analyzed with the help of Ordinary Least Square
(OLE) algorithm. The entire analysis has been conducted in four steps as below:
 Fitting double-log regression model on the data
 Fitting log-log regression model on all data except advertising
 Conducting the Augmented Dickey-Fuller (ADF) test and
 Fitting log-linear partial-adjustment model on the data
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Selecting the preferred alternative
As far as the selection of alternatives is concerned, it has been noted that the
intended research paper aims to test the hypothesis set for the purpose to extract
the hidden relationship between advertising and marketing mix variables. The
quantitative analysis and test of hypothesis have confirmed that all such hypothesis
is being met denoting the fact that marketing mix variables may have a positive
impact on sales in terms of short term and long-term effect. It has been also
observed that the short term effect is more than that are a long-term effect. In other
words, advertising expenses incurred in the current period may be more effective to
increase sales in the current period only (Agarwal & Agrawalla, 2017). Present
advertising initiatives may not have a positive impact to enhance revenue in the
future period. Similarly, past marketing initiatives may not be proved to be fruitful to
increase current year sales as well. However, the third hypothesis has not been
nullified and tested to be true. In summary, the extent of long-term impact has been
less than that of short-term impact (Koo, Kim & Kim, 2016).
Developing an action/implementation plan
Since the advertising and marketing mix variables may have a positive and short-
term impact on business sales, the same should be a critical point of consideration
for the managers of the business to boost up sales. Effort should be undertaken by
the managers to focus on each of the marketing mix variables to efficiently strategize
them and apply the same to boost sales considering a short-term time frame
(Gunasekharan, Basha & Lakshmanna, 2016). In other words, the action plan will
encompass consideration of marketing mix variables to enhance business revenue
in short term and for the purpose, initiatives may be taken to design the marketing
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mix variables effectively under broader marketing strategy of the business (Lotfifard
& Borojerdi, 2018).
Conclusion
Based on the aforesaid discussion and analysis, the researcher here finally
concludes that the intended case study has been a learning material for future
researchers in the given field because of its originality (Blut Teller & Floh, 2018).
Though the analyzed research paper may suffer from certain limitations such as its
limited analysis in Indian context only or its lesser number of samples collected etc.
still the implications of finding may be critical for the business (Sarker, 2019). Finally,
it may be concluded that the analysis of multiple brands or multi-product classes will
provide a better understanding about the impact of advertising on business revenue
and the basic fact of the impact of marketing variable on business revenue will be
retested and revalidated in the most scientific and optimum manner (Hu & Xu, 2019,
May).
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References
Baidya, M., Maity, B., & Ghose, K. (2012). Measuring the dynamic effects of
advertising: a case study in India. Journal of Indian Business Research.
Yusi, M. S., & Idris, U. (2018). Marketing Environment and Marketing Mix: The Basic
Factors in Increasing Sales Performance (Survey on Agribusiness Small and
Medium Enterprises). Journal of Economics and Business, 1(1), 19-33.
Gunasekharan, T., Basha, S. S., & Lakshmanna, B. C. (2016). A Study on the
impact of Promotion Mix elements-Sales promotion & Direct Marketing of DTH
manufactures on Customer Behaviour. ITIHAS The Journal of Indian
Management, 6(1), 67-72.
Agarwal, V., & Agrawalla, S. (2017). Patanjali’s marketing mix: the monk’s new
Ferrari. Emerald Emerging Markets Case Studies.
Bhargav, S. (2017). A Study on the Marketing Mix of Hospitality Industry.
International Journal of Management, IT and Engineering, 7(9), 253-265.
Koo, K. R., Kim, S. J., & Kim, K. H. (2016). The effects of internal marketing
capability on export marketing strategy, B2B marketing mix and export
performance. Journal of Global Scholars of Marketing Science, 26(1), 51-65.
Blut, M., Teller, C., & Floh, A. (2018). Testing retail marketing-mix effects on
patronage: A meta-analysis. Journal of Retailing, 94(2), 113-135.
Lotfifard, S., & Borojerdi, P. N. (2018). Study and evaluate the effect of marketing
mix on export performance (case study: Nestle Corporation in Qazvin
Province). International Review, (1-2), 73-82.
Sarker, R. H. (2019). Service Marketing Mix and its impact on Bank’s Marketing
Performance: A case study on Janata Bank Limited.
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Hu, Y., & Xu, B. (2019, May). The Research of the Each Other Support between
Online Sales and Offline Store based on the Marketing Mix. In 1st
International Conference on Business, Economics, Management Science
(BEMS 2019). Atlantis Press.
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