&
EFFECTIVENESS OF ADVERTISEMENT SPENDING
on
CONSUMER MIND-SET METRICS
AND
SALES
MODERATING EFFECTS OF
COMPETITIVE CLUTTER
#
1st Supervisor: Dr. ir. Maarten Gijsenberg
2nd Supervisor: Dr. P.S van Eck Muren Mehmed
#1918028
“ I know half the money
I spend on advertising is
wasted, but I can never
find out which half.”
John Wanamaker (1838-1922)
BACKGROUND
|
WHAT is the problem ?
• Effectiveness of Advertisement spending: increasing call for its accountability.
• Advertisement effectiveness is questioned by the managers. • Decreasing role in strategic decision making.
WHAT DO WE KNOW ?
• Advertising contributes to sales.
• Advertising influences consumer mind-set metrics.
• Advertising simultaneously stimulates sales and mind-set metrics. • Competition influences the advertisement effectiveness.
• Effects of advertising varies depending on product category.
BACKGROUND
BACKGROUND
|
WHAT WE DO NOT KNOW ?
• Previous studies are done in FMCG industry, are they also applicable to durables, e.g automobiles ?
• Advertisement is suggested to have varying strength on mind-set metrics for different FMCG products.
-How is it for durables ?
RESEARCH QUESTION
|
MAIN QUESTION
How advertising expenditure moderated by the competitive clutter affect the sales growth and consumer mind-set metrics ?
SUB QUESTIONS
• Does advertising spending effect sales ?
• Does advertising spending effect consumer mind-set metrics ? • Do mind-set metrics effect sales ?
• Do the competitive clutter effect the influence of advertising spending on sales ?
• Do the competitive clutter effect the influence of advertising spending on consumer mind-set metrics ?
H1: Advertisement spending has positive impact on the sales. H2: Advertisement spending affects consumer mind-set metrics. H3: Consumer mind-set metrics effect sales growth.
H4: Advertisement spending simultaneously affect consumer mind-set metrics
and sales.
H5: Advertisement spending of competitors has negative impact on consumer
mind-set metrics.
H5a: Advertisement spending of competitors has negative impact on sales. H6: The number of competitors that are advertising have negative impact on
sales.
H6a: The number of competitors that are advertising has negative impact on
consumer mind-set metrics
HYPOTHESES
METHODOLOGY
Variable Operationalization :
Procedure:
• Moderated Mediation Analysis via PROCESS macro
• Added Z method
RESULTS
RESULTS
|
Multicollinearity: VIF scores range between 1.04 and 3.21
Normality: Assumption accepted.
- Error terms distributed normally (p > .05)
Independence of error terms : Assumption neither accepted nor rejected.
- DW test results fall in inconclusive area. ( dL 1.104 < DW < dU 1.932 )
CONCLUSION
|
H1 : Advertisement spending does not have significant effect on sales
H2: Advertisement spending has significant positive effect on consumer mind-set metrics.
H3: Only Awareness has significant positive effect on sales.
H4: Advertisement spending does not simultaneously effect consumer
mind-set metrics and sales
H5: Competitive clutter does not have significant effect on relationship
between advertisement spending and consumer mind-set metrics.
H6: Competitive clutter does not have significant effect on relationship
IMPLICATIONS
|
• Advertisement spending decisions based on competitors or industry level advertising might not be the optimum decision.
• Assessing advertisement effectiveness solely based on sales and market share might result in underestimation of its true potential. • Advertisement spending affects consumer mind-set metrics, rather
than sales.
• Advertisement budget allocations or design of the campaigns should pre-dominantly target consumers’ hearts and minds.
LIMITATIONS
&FURTHER RESEARCH
|
• Limited data on consumer mind-set metrics.
- e.g liking, would provide better understanding of advertisement effectiveness.
• Overall advertisement spending
- Different channels have different effects.
• Limited variables to explain the dependent variables.
• Competition can be investigated more vastly, e.g firm size.
• Not only the spending but also the content of the advertisement is important.
• Effects of advertisement as well as competitive clutter, can vary in long and short term.
