The Effect Of Advertising On Firm Performance

Advertising is a non-price behavior,which influences the attitude and behavior of the target audience through the transmission of information.It plays an important role in promoting the sale of goods and shaping the personality of the brand to enhance the competitiveness of enterprises.Therefore,enterprises in the market economy attach importance to advertising,and some even hesitate to spend huge amounts on it.This paper examines the impact of advertising input on the performance of FMCG and durable consumer goods.In this paper,the data of listed companies of A— share consumer goods industry in 2012-2015 were taken as samples,964 observations.We construct the fixed effect model and threshold panel model to study the impact of advertising on corporate performance.The conclusions are as follows:(1)The intensity and volume of advertising in the FMCG industry are significantly higher than those of the durable consumer goods industry.However,the effect of advertising investment on corporate performance is not as good as that of durable consumer goods industry.(2)Advertising investment has a positive but nonlinear effect on corporate performance,and the effect of diminishing marginal returns in the FMCG industry is stronger.Compared with other factors that affect the performance of enterprises,the total assets and operating life play the most significant role,advertising investment center,R&D investment is the smallest and only has effect on durable consumer goods.(3)The advertising intensity of FMCG industry appears obvious polarization phenomenon,the advertising intensity of food and beverage manufacturing enterprises are low,some may appear excessive advertising;consumer durables industry advertising inputs distributed more evenly,advertising intensity of the transportation equipment manufacturing industry generally low,there may be a shortage of advertising.Finally,this paper puts forward some suggestions for different enterprises to make reasonable advertising programs according to the research conclusions.