Mba Economic: Panadol Research Paper
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ContentsCHAPTER 0 INTRODUCTION CHAPTER 0 LITERATURE REVIEW CHAPTER 0 INTRODUCTION TO SELECTED ORGANIZATION AND THE PRODUCT Introduction to the selected product Introduction to the selected Organization Organization Vision Organization Mission CHAPTER 04 DATA ANALYSISS Simple linear regression model Estimating the regression equation Hypothesis test Coefficient of determination coeffcient of correlation CHAPTER 05 CONCLUSION AND RECOMMENDATIONS……………………………………………………………………………………….9Conclusion Recommendations References……………………………………………………………………………………………………………………….10Annexure 01 1Annexure 02 2CHAPTER 01 INTRODUCTIONAdvertising and promotional expenditure can be explained as one of the essential component of the armoury of most companies in maximizing sales revenue (Zinkhan & Zinkhan, 1997).Many researchers and groups have focused their attention on identifying the effect or the relationship between the two variables mentioned. According to Srivastava advertising can create market-based assets that can contribute to the revenue increase, thereby enhancing overall shareholder value. The second most underlining effect is that the advertising expenditure positively affect in enhancing the awareness and knowledge level of the customers influencing both short term and long term demand for product. Further Hirschey and Jones argue that advertising has multi-period effects on sales and market share. Greater amount of researches and empirical studies can be found on the study of relationship between the advertising expenditure and sales revenue almost all indicating a positive relationship, most of these studies also highlight the fact that advertising positively affects brand equity through brand associations and act as a medium of transmitting the quality.(Chauvin & Hirschey,1993;Rao et al,2004),(Simon and Sullivan,1993).The following analysis was done on product “Panadol” Sri Lanka’s number one pain relief over four decades to assess whether there exists any relationship between the advertising expenditure and sales revenue and to forward suggestions or recommendations to management for improvement and to provide further awareness.
CHAPTER 02 LITERATURE REVIEWEricson and Jacobson argues that the advertising expenditure can enhance brand name recognition and create a brand premium so that the brand can gain a competitive advantage relatively to other products in the market which can be considered as substitutes.(Ericson & Jacobson,1993).Also advertising expenditure can be used as an entrance barrier to prevent potential competitors or new comers which can be future competitors from entering in to market, This is because of the amount of advertising expenditure that the new comer needs to spent on gaining brand loyalty to gain sales or market share from the already established brand. One of the early studies on usefulness of advertising expenditure was done by Comanor and Wilson who elaborates the importance of advertising expenditure on differentiating and in the case of a market entry. They also have identified and further explain about the relationship between firm’s profit and advertising expenses. (Comanor & Wilson, 1967)Another important piece of study was done by Hirschey who examine the market value of a business unit in relation to its period of advertising also further studies have elaborated that there is a positive impact on products market value from advertising expenditure.(Hirschey & Weygandt,1985). Further studies done on the same subject by Mork and Yeung, Bharadwaj et al and Rao et al all found that there exists a positive, long term impact on firm’s value from advertising. More recent literature on the same can be found in the study by Joshi and Hanssens who also states that there is a evident positive relationship between the firms advertising expenditure and market capitalization or in other words sales revenue. (Joshi & Hanssens, 2005).Much different scope on the matter is also evident among the scholars and authors one such argument is that the effect created by advertising on sales is short term oriented and more other factors contributes in the long run.(Bublitz & Ettredge,1989).This stream of literature further argues that focusing only on advertising expenditure ignoring other firm specific factors resulted in overestimation of the impact of advertising.(Landes & Rosenfield,1994).A further extension of this is the argument that advertising expenditure as well as new product introduction together affect the sales revenue positively in both short run and long run.(Pauwels et al,2004).In summery the majority of the arguments favour fact that there exists a positive relationship between the advertising expenditure and sales revenue. CHAPTER 03INTRODUCTION TO SELECTED ORGANIZATION AND THE PRODUCT Introduction to the selected productPanadol has been a household name in Srilankan market for over 40 years And has become the trusted choice for pain relief in Sri Lanka.The brand has been positioned as an analgesic tablet in the Over the Counter (OTC) product category. The brand holds 92% market share in the household market and a 74% market share in the retail market. The brand believes to be superior to other paracetamols in its dissolution profile and quality of ingredients.Panadol was launched in 1956 as a global brand and the “dol” in the name was derived from latin world “dolor” which means pain and the entire Panadol name stands for the meaning “relief from pain”