Analysis of Benefits and Costs of Advertising by Manufacturers of Dry Construction Mixes

Abstract

The article examines the application of Analysis of Benefits and Costs (ABC) method in evaluating the effectiveness of advertising costs incurred by manufacturers of dry construction mixes. It offers estimates as to how soon spending on advertising of certain product groups translates into an increase in sales. Observations focus on a local producer of dry construction mixes. The analysis has revealed that the actual volume of product sales is influenced by such factors as seasonal patterns, the consumer price index, and advertising. There are discernible cyclical and seasonal fluctuations in combination with a trend component. The article describes the correlation between sales volumes and advertising costs. It also provides estimates as to how soon an increase in advertising costs translates into higher sales. It has transpired that an increase in spending on participation in exhibitions and presentations produces an increase in sales of glue of the Universal brand 1.06 months later on average. Articles appearing in specialist publications produce an increase in sales of glue of the "Superpolymer" brand and the Universal brand 2.1 months and 1.9 months later, respectively.

DOI: 10.5901/mjss.2014.v5n23p315