BUSN20019 - Marketing Report: Advertisement and Profitability

This report investigates the relationship between advertisement and profit generation, focusing on the impact of marketing strategies on business profitability. The study uses secondary data from financial reports of companies like Procter & Gamble to establish a correlation between advertising expenditure and net profit. It explores how advertisement creates consumer awareness, driving revenue and enabling companies to manage expenses effectively. The research addresses the question of whether luxury brands' digital proficiency affects brand value. The report also reviews relevant literature, including articles that discuss the impact of social media on advertisement and brand value. This analysis provides valuable insights into the significance of advertisement in driving financial success in the global market, particularly for multinational corporations. Desklib offers this and other solved assignments for students to aid in their studies.

Running head: MARKETING AND PROFIT GENERATION
Relationship between Advertisement and Generation of Profits
Name of the Student:
Name of the University:
Author Note:

1
MARKETING AND PROFIT GENERATION
Field of research:
Advertisement has direct impact on the profit generated by the multinational companies
in the global market. Multinational companies like Procter & Gamble have to bear immense
expenditure while operating in the global market right from the cost of branch operations to
advertisement expenses to market their products. The costs of operations which multinational
companies have to bear like salary expenses and marketing expenses always tends to increase.
The multinational companies, most of which are listed companies need to acquire immense
capital from the investors to fund their operations. Thus, as a result they have to insure that they
give back high returns on investments to shareholders in order to able to generate further capital.
This means the global business organizations have to earn super normal profits in order to be
able to diversify business operational expenses, give back high ROI to investors and ensure that
they are able to enjoy immense net profit after taxes which they would be able to mobilize back
into operations. Advertisement of goods and services in the global market enables the business
organizations to create awareness among consumers which in turn attract customers towards
them. Thus, advertisement enables the companies to generate high revenue over they are able to
diversify their expenses and losses and yet enjoy high net profits. The graph below shows the
gross profit and net sales which P&G is earning show a decreasing trend. The net earnings or net
profit of the company also shows a decreasing trend. This fall in the net sales, gross profit and
consequent net profits can be attributed to falling expenses which the company can attribute to
the falling advertising expenses. Thus, it can be established on the basis of the analysis that
advertisement has direct impact on the net profits generated. That is why multinational
companies in order to generate high revenue and consequent high profits incur advertisement
expenses.

2
MARKETING AND PROFIT GENERATION
Year
1(2013) Year
2(2014) Year
3(2015) Year
4(2016) Year 5
(2017) Year 6
(2018)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Chart Title
Net sales($m)
Gross profit($m)
Net earnings attributable to Procter & Gamble($m)
Advertising expense($m)
Secondary data:
The data showing the relationship between profit generation and advertisement through
the lens of P&G can be obtained from two links. The data about the financial performance of
P&G from 2013 to 2018 can be on (http://www.pginvestor.com/Cache/1001242072.PDF?
O=PDF&T=&Y=&D=&FID=1001242072&iid=4004124). The financial data of P&G for the
2007 to 2012 can be obtained from the link
(http://www.pginvestor.com/Cache/1001174630.PDF?
O=PDF&T=&Y=&D=&FID=1001174630&iid=4004124).
RQ:
The study aims to establish the relationship between advertisement and net profit
generation. Specific RQ: What is the relationship between advertisement and profit generation?
Search terms:
Advertisement, marketing, consumer goods, profits

3
MARKETING AND PROFIT GENERATION
Merged articles and reference list:
Parveen, Jaafar and Ainin (2015) initiates the discussion by viewing the advertisement
activities of products which companies execute from a social media view. Li et al. (2016)
support the argument by pointing out that business organizations in order to get access to a large
base of consumers around the world are increasingly using the digital marketing platform.
Bharucha (2016) finally close the discussion by pointing out brand value plays an important role
in advertisement of products and generation of profits.
Bharucha, J. (2016). Cadbury Vs Nestle: A Study of The Chocolate War. International Journal
of Research in Social Sciences, 6(9), 609-620.
Li, H., Kannan, P. K., Viswanathan, S., & Pani, A. (2016). Attribution strategies and return on
keyword investment in paid search advertising. Marketing Science, 35(6), 831-848.
Parveen, F., Jaafar, N. I., & Ainin, S. (2016). Social media’s impact on organizational
performance and entrepreneurial orientation in organizations. Management
Decision, 54(9), 2208-2234.