Abstract:
There are different views about the role of advertising in an economy. The ultimate objective of advertising is to increase sales. This paper studies the effectiveness of advertising on sales using simple regression models and dummy variable regression models with a cross-section data set of 100 firms in India. The paper evaluates the effectiveness of advertising on sales separately for large firms and small firms, and for MNCs and Indian firms. The results show that advertising influences sales, though its relative effectiveness is not the same for all categories of firms.
