ArticlePDF Available

Abstract

Today, all economies are related with others due to the acceleration of globalization process. Huge financial movements in a globalized world can be the reasons for fluctuations in many countries especially the emerging countries [1]. The financial and economic crises have the potential to lead in a period of a global recession that may seriously destabilize all countries’ process of economic growth and transformation. In particular, the crisis may put a brake on and also reverse efforts in developing countries [2]. In this study, “the effect of marketing expenditures on company performance during financial crises periods” has been the main question. Within this framework, a review of the literature and a statement of the research questions, followed by the methodology and the findings are evaluated. Assessment on the results and conclusions about the effect of marketing expenditures on company sales performance are presented. This paper has its originality for finding out the effects of marketing expenditures, R&D expenditures and macroeconomic data (growth, inflation and foreign currency) on company performance within specific periods i.e. 2001 and 2008 crises in Turkey.
Available online at www.sciencedirect.comAvailable online at www.sciencedirect.com
1877–0428 © 2011 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of 7th International Strategic Management Conference
doi:10.1016/j.sbspro.2011.09.105
Procedia Social and Behavioral Sciences 24 (2011) 291–299
7
th
International Strategic Management Conference
The effect of marketing expenditures during financial crisis:
the case of Turkey
Aykan Candemir
a
, Ali Erhan Zalluhoglu
b
, a
ab
Ege University, Faculty of Business and Administrative Sciences, Bornova, Izmir, 35040, Turkey
Abstract
Today, all economies are related with others due to the acceleration of globalization process. Huge financial
movements in a globalized world can be the reasons for fluctuations in many countries especially the emerging
countries [1]. The financial and economic crises have the potential to lead in a period of a global recession that may
seriously destabilize all countries’ process of economic growth and transformation. In particular, the crisis may put a
brake on and also reverse efforts in developing countries [2]. In this study, “the effect of marketing expenditures on
company performance during financial crises periods” has been the main question. Within this framework, a review
of the literature and a statement of the research questions, followed by the methodology and the findings are
evaluated. Assessment on the results and conclusions about the effect of marketing expenditures on company sales
performance are presented. This paper has its originality for finding out the effects of marketing expenditures, R&D
expenditures and macroeconomic data (growth, inflation and foreign currency) on company performance within
specific periods i.e. 2001 and 2008 crises in Turkey.
Keywords: Marketing expenditures, crisis, financial crisis, Turkey, company sales
© 2011 Published by Elsevier Ltd. Selection and/or peer-review under responsibility 7
th
International
Strategic Management Conference
1. Introduction
Globalization since the mid-1980s has been marked by the increase in global trade and a surge in
capital flows among industrial countries and, more notably, between industrial and developing countries.
Although capital inflows have been associated with high growth rates in some developing countries, a
number of them have also experienced periodic collapses in growth rates and significant financial crises
that have had substantial macroeconomic and social costs
[3].
Political and economic changes, changes in
consumer demand, market structures, product and market life cycles, domestic and foreign competition
and the degree of effects caused by these changes became more significant. Such changes force the
companies to implement flexible strategies and action plans.
Corresponding author. Tel. + 90-232-311-1915 fax. +90-232-373-4194
Email address: aykan.candemir@ege.edu.tr
© 2011 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of 7th International Strategic
Management Conference
292 Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
2. Literature Review
Crises are unexpected events that stop the ability of the management and affect its performance
[4].
Financial crises are more complicated and affect all decision makers both economically and socially.
The crisis has exposed fundamental weaknesses in financial systems worldwide, demonstrated how
interconnected and interdependent economies are
[5].
In fact, developing economies are more vulnerable
to the factors that lead to crises, such as: banks and private agents exposure to currency and maturity
mismatch, disruption in international capital markets, banks panic
[6,1,2].
Financial crises affect also
private agents’ behaviour, increasing uncertainty about future gains and decreasing the level of
investment, consumption and export compositions
[1].
For less developed countries and emerging markets, economic crisis is one of the most fundamental
problems for the last 10-15 years, such as Turkey
[7].
Since liberalization of the 1980s were not followed
by necessary legal and institutional reforms, the countries became vulnerable to various crises through a
series of short-term cycles of instability-crisis-(unsustained) growth- instability throughout the 1990’s,
[8,9,10,11].
In mid-February 2001, Turkey experienced one of the worst economic crises in its recent
history and as a result, experienced a substantial fall in its Gross National Product from US$201.4 billion
in 2000 to $148 billion in 2001 and the result was a huge cost on the Turkish economy in terms of lost
monetary credibility, significant balance sheet deterioration and more importantly a very deep contraction
The daily average overnight interest rates shot up to (simple annual) 2000 percent on February 16 20, and
4000 percent on February 21.8 The government could not resist and dropped its exchange rate controls
early February 22 and the TRL/USD exchange rate went up 40% in one week. Monthly inflation was
10% and 14% in March and April of 2001 respectively
[12, 13,14].
Following the series of boom and busts
between the late 1980s and the early 2000s, Turkey enjoyed strong and uninterrupted expansion until the
2007-2008 crisis started off in August 2007
[15].
Global financial crisis as a subprime mortgage crisis
primarily concentrated in the United States but quickly metamorphosized into a global financial crisis
where financial institutions teeter on the edge of bankruptcy in many countries
[16].
Countries around the
globe witnessed major declines in output, employment, and trade. GDP in industrial countries fell by 4.5
percent in 2008, and average real GDP growth in emerging economies dropped from 8.8 percent in 2007
to 0.4 at the beginning of 2009. The unemployment rate rose to 9 percent across OECD economies, and
reached double digits in a mix of industrial and developing nations. World trade volume plummeted by
more than 40 percent in the second half of 2008, collapsing at a rate that outpaced the fall of aggregate
output
[8].
This first global financial crisis of the twenty first century has made negative impacts on the
economic and financial indicators of not only many developed and developing countries but also Turkey.
In the scope of the stimulus packages introduced in Turkey to mitigate the effects of the crisis, subsidies
and tax cuts have been offered for the companies and consumers
[17,18].
Graph 1. Average Inflation in Periods (1997-2010%)
Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
293
Graph 2. Average Growth Rate in Periods (1997-2010%)
During a crisis, survival of the whole organization is in jeopardy. It imposes severe strain on the
organization's financial, physical, and emotional structures. Managers, when asked to define crises,
suggest that they are composed of five dimensions: high magnitude, require immediate attention, an
element of surprise, the need for taking action, and are outside the organization's [complete] control
[19]
.
Fewer purchases are made; purchases of selected products, especially luxuries, are postponed; price
becomes a more critical consideration in decision-making; and purchases are driven more by specific
benefits sought. Psychologically and financially, crisis-hit consumers behave differently from those
enjoying economic prosperity
[20].
Many strategies are suggested by researchers to survive the companies
during the crises. To increase the marketing expenditures is one of the suggested ways. Especially, during
and after recession period, the researches has been shown that those increasing or focusing marketing
activities will increase sales, income and market share of companies
[21,22].
In Turkey, companies felt
obliged to apply necessary changes through the goals they’ve mostly taken into consideration as a result
of being influenced by crisis. Among these, the most important ones has become; improving new
marketing techniques, decreasing general expenses, economy and downsizing, performing quality control
increasing productivity, improving new processes and healing them
[23]
According to a study based on
the PIMS database, companies with bold strategies to invest aggressively in marketing, innovation and
customer quality will thrive during the market upturn
[24].
Furthermore, businesses that increased their
marketing budgets during a recession gained market share more quickly as those that had cut them
[21,25].
Marketing activities in the core business are clearly the major determinant of profitability in both good
times and bad. A "market orientation" aids profitability. The return to marketing activities decreases
during a contraction
[26].
294 Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
Companies simultaneously increase their marketing and R&D spending report the greatest growth in
revenues and in net income and the greatest stock price drift, whereas companies cutting their spending in
these areas report the lowest growth and the lowest drift
[27].
Investors view R&D expenditures as
investments that are expected to produce future benefits
[28].
Studies have shown that a company that
invests in R&D at a level greater than its competition can be expected to experience greater long-term
sales growth
[29, 30, 31].
Manufacturing companies benefit most from investment in R&D [32].
3. Methodology
In this study, the effects of marketing expenditures on company sales during the crisis periods are
examined. Companies from Istanbul Stock Exchange are selected and the data of the companies are
obtained from their annual financial reports and The Istanbul Stock Exchange database. The study
covered the analyses for two important crisis periods (i.e. 2001 and 2008 crises) which had serious effects
on Turkish economy in the last two decades. Data of fundamental financial indicators (i.e. sales
revenues, research and development and sales expenditures) are analyzed via correlation and regression
analysis. Also macroeconomic and other economic data and indicators (i.e. inflation, currency rates, and
growth rate of Turkey) for the related periods were taken into account. Net sales are the dependent,
research and development and sales expenditures, inflation, currency rates, and growth rate of Turkey are
the independent variables in the models. US Dollar is taken as the currency rate and the values taken are
based on 1995=100 as dollar, because of sensitivity of Turkish economy to dollar currency.
Production in the food and beverage sector reached TRY 8,852 million in 2009, which constitutes 18-
20 percent of the country’s production as a whole. It is largely dependent on the agricultural sector in
Turkey. A wide range of crops grow in Turkey helped by the generally benign climate. Significant sub-
sectors within the Turkish food and beverage industry include meat and meat products, baked products,
dairy products, fruits and vegetables, oils, confectionery, alcoholic and non-alcoholic drinks, soft drinks,
ready-made food and baby food [33].
4. Findings
Companies are selected from food sector which offer products to final consumers. In order to
determine the econometric model (fixed or random) hausman test was implemented and depending on the
the results of the test fixed model was chosen. For this purpose, out of the companies in food sector 9
companies with available data between 1997-2010 are chosen i.e. Banvit Inc., Kerevitas Food Industry
and Trade Inc., Konfrut Food Industry and Trade Inc., Kristal Cola and Beverage Industry Trade Inc.,
Merko Food Industry, Penguen Food Inc., Pinar Mineral Water Inc. Co., Pınar Milk Inc. Co., Tukas Food
Industry and Trade Inc., are analysed and cross sectional data are analyzed by using fixed effect panel
data analysis for 1997-2010. Panel data analysis is a method of studying a particular subject within
multiple sites, periodically observed over a defined time frame. Within the social sciences, panel analysis
enables researchers to undertake longitudinal analyses in a wide variety of fields [34].The data of R&D
expenditures since 1997 was available and continuous for only four companies i.e. Banvit Inc., Tukas
Food Industry and Trade Inc., Kristal Cola and Beverage Industry Trade Inc. and Pınar Milk Inc. Co.
Graph 3. Marketing, Net Sales and R&D Expenditures of Four Companies
Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
295
Marketing, Net Sales and R&D Expenditures of
Banvit Inc. (1997-2010)
Marketing, Net Sales and R&D Expenditures of
Kristal Kola Inc. (1997-2010)
Marketing, Net Sales and R&D Expenditures of
PINAR MILK Inc. (1997-2010)
Marketing, Net Sales and R&D Expenditures of
TUKAS Inc. (1997-2010)
The effects of marketing expenditures on company sales during the crisis periods are examined and
presented by E-views 5.0 statistical packages. The main constraints are the lack of long term data about
the companies the unavailability of publicly shared data for a R&D number of companies and sectors. All
the macroeconomic data are in percent values, so logarithmic values were used for financial indicators to
find the efficient model. The abbreviations in the models were as;
C = constant
NS = Net sales
R&D= R&D Expenditures
ME= Marketing Expenditures
Inf= Inflation rate
GROWTH= Growth rate of Turkey (to follow the effect of crisis)
USD= Currency rate of dollar
Model 1.
296 Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
LOG(NS) = 11,45398 – 0.018 LOG(R&D) + 0.42 LOG(ME) -0.01 INF -0.01 GROWTH +0,004 USD
T statistic (13,93) (-0,93) (8,97) (-6,99) (-3,46) (2,63)
P-value (0,00) (0,35) (0,00) (0,00) (0,00) (0,01)
R-squared= 0,99 DW stat= 1,35
Model 1 was constructed by using the data 1997-2010 to understand the effects of variables on net
sales. To control the autocorrelation of model, DW value is 1.35 and it is an inconclusive, also R-squared
is 0, 99 so we can accept that the model is fit. But the coefficients of the R&D has a problem, t value of
R&D is higher than 0.05 so the coefficient of R&D is not significant. This is why the companies which
analyzed in study have not R&D expenditures or only four of them have continuous R&D expenditures.
However, marketing expenditures in model 1 are supported the previous researches about the effect on
net sales [21,22]. The regression indicates that the 1% of increase in marketing expenditure affects the net
sales nearly 0, 42%. Increasing of dollar currency has positive effects on net sales because of export
oriented companies. Nevertheless, the coefficient of inflation rate is negative and this means any
increasing in inflation can decrease the net sales as a result of consumer behavior related to saving. In
literature, many studies noticed that the expected rate of inflation consistently show a negative impact on
consumer spending [20,35]. Usually, growth rate of country has a positive relation [20]. With the sales of
companies; on the contrary, in model 1 affects of growth rate on net sales is negatively.
Model 2.
LOG(NS) = 1.165357– 0.008 LOG(R&D) + 1,14 LOG(ME) +0.01 INF -0.01 GROWTH - 0,01 USD
T statistic (0,89) ( 0,23) (9,90) (3,05) (2,99) (-3,58)
P-value (0,39) (0,82) (0,00) (0,01) (0,01) (0,00)
R-squared= 0,99 DW stat= 1,16
Model 2 is constructed by using the data 1997–2002 to understand the effects of variables on net sales
during the 2001 crisis. To examine the autocorrelation of model, DW value is 1.16 but for N= 16; k=5
DW value is an inconclusive, also R-squared is 0, 99 so we can accept that the model is fit. Coefficient of
R&D expenditure is not significant as Model 1, also constant’ coefficient is not significant. R&D
expenditures for analyzed companies were not suitable for the model since the companies did not have
stable data for R&D expenditures and many companies started and/or increased their R&D expenditures
in the last decade. Marketing expenditure has an effect on net sales as model 1 but coefficient ME in
Model 2 is higher than the coefficient ME of Model 2. As it seen in regression Model 2, marketing
expenditure has greater effect on net sales during the crisis [21,25]. On the other side, changes in foreign
currency have negative impact on net sales between 1997-2002 periods.
Model 3.
LOG(NS) = 10,79072 + 0,1215 LOG(R&D) + 0,32 LOG(ME) +0.002 INF -0.08 GROWTH + 0,007 USD
T statistic (6,86) ( 2,43) (5,4) (0,23) (-1,42) (3,12)
P-value (0,00) (0,02) (0,00) (0,81) (0,16) (0,00)
R-squared= 0,99 DW stat= 1,24
In Model 3, the data between 2003-2010 are used to evaluate the post-crisis developments and measure
the period before and after the world financial crisis of 2007-2008 as well as aiming to minimize the
effects of budget consolidation due to changes in regulations. The high R-squared value presents the
Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
297
fitness of the model and 1.24 value of durbin-watson keeps the autocorrelation prediction as an
inconclusive.
Within this context when model 3 is examined, growth rate and inflation are found as meaningful and
fit to the model. 2003-2010 period highlights the importance and the increase of the R&D expenditures
[27]. The R&D expenditures which seemed as meaningless and/or ineffective appears as an important and
effective variable on sales as presented by the studies in the literature
[29, 30, 31].
Marketing expenditures
also acts as one of the major actors on company sales. US dollar also seems to have effects on net sales.
The currency rates affected the export sales and thus the total sales positively.
Model 4.
LOG(NS) = 6,7537+ 0,274 LOG(R&D) + 0,44 LOG(ME) +0.007 INF -0.007 GROWTH + 0,008 USD
T statistic (2,55) ( 2,84) (5,35) (0,69) (-1,07) (3,47)
P-value (0,01) (0,00) (0,00) (0,49) (0,29) (0,00)
R-squared= 0,99 DW stat= 1,54
In the study since autocorrelation was found in the periods 1997-2010, 1997-2002 when the companies
with regular R&D expenditures the analyses related with these periods and companies are not presented
here. However in the model constructed to examine the 2003-2010 period, DW value is 1.54 and it is an
inconclusive, also R-squared is 0, 99 so we can accept that the model is fit. In model 4, findings note the
important effect of R&D expenditures on sales. Research and developments and marketing expenditures
have great positive effect on net sales in model 4, too. In model 4, inflation and growth rate can be seen as
ineffective however, similar to Model 3, R&D expenditures, marketing expenditures and currency rate
appears as explaining variables of the model.
4. Results and Suggestions
The analyses notice the importance of marketing expenditures on sales in Turkey like the other
countries. Especially during the crises periods and after, marketing expenditures are found as having
significant effects on sales. Besides the effects of marketing expenditures, R&D expenditures, despite
being a relatively new but important concept for the many Turkish companies, have noteworthy effects.
Parallel findings with the previous studies are found about the positive effects of the R&D expenditures.
Macro data, on the other hand, seem to reveal inconsistencies in the models.
The companies, giving importance to marketing expenditures and even increasing them during the
crises periods may not only achieve the opportunity to overcome the difficulties but also gain competitive
power. Increasing the R&D budget, in spite of all the financial limitations imposed by a crisis, has an
important impact on performance
[21].
Cutting marketing expenditure could result in massive long-term
damage to sales. R&D expenditures in recession, both in absolute terms and relative competition pay off
handsomely. R&D expenditures is such a particularly “good cost” during recession
[24].
Expenditures for
R&D activities for new technology and product development and/or improvement may increase the
competitive strength of the companies.
The obvious fact is that a well planned general marketing strategy supported by research and
development activities, focusing on product development and/or product improvement, is effective in
increasing company sales. Thus, to survive, stay competitive and even be successful during an economic
crisis, strategy and decision makers should focus on well planned strategies, as well as monitoring the
changes in the external environment of the company presented by the findings of this study.
298 Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
References
[1] Furceri D, Zdzienick A. The real effect of financial crises in european transition economies, Economics of Transition, 19 (1),
2010, p. 1-25.
[2] United Nations Conference on Trade and Development (UNCTAD). Global economic crisis: implications for trade and
development. Trade and Development Board, Trade and Development Commission, First session, 11-15 May, Geneva: UNCTAD,
2009. available at http://www.unctad.org/en/docs/cicrp1_en.pdf.
[3] Prasad ES, Rogoff K, Wei SJ, Kose AM, Effects of financial globalization on developing countries: some empirical evidence
ınternational monetary fund, Occasional paper 220, 2003.
[4].Jimenez D. When you are the headline: a guide to understanding crisis management, Franchising World, April, Vol:33, No:3,
2001, p.1-3
[5] Nanto DK. The global financial crisis, analysis and policy implications, Congressional Research Service Report, 2009.
[6] Chang, R, Velasco A. The Asian Liquidity Crisis, NBER Working Paper 6796, 1998.
[7] Yucel M, Yildirim Y. The last three significant crises that faced in turkey’s economy and their effects to manufacturing sector,
Turgut Ozal International Conference On Economics And Politics-I Global Crises and Economic Governance,15-16 April,
Malatya/Turkey, 2010.
[8] Alfaro, L, Chen M. Surviving the global financial crisis: foreign direct investment and establishment performance, Harvard
Business School Working Papers, 10-110; 2010, p.1-43.
[9] Koch L, Chaudhary MA. February 2001 crisis in Turkey: causes and consequences, The Pakistan Development Review, 40: 4
Part-II (Winter), 2001, p.467–486.
[10] Yeldan E. Behind the 2000/2001 Turkish crisis: stability, credibility and governance for Whom?, International Development
Economics Associates (IDEAs) Conference on International Money and Developing Countries: Theoretical and Policy Issues in the
Current Context, 16–19 December, Chennai, India, 2002.
[11] Boratav K. 2000/2001 krizinde sermaye hareketleri, øktisat øsletme ve Finans Dergisi, Eylül Sayısı, 2001, p.7-17.
[12] Okumus F, Karamustafa K. Impact of an economic crisis evidence from Turkey, Annuals of Tourism Research, Volume 32,
Issue 4, 2005, p. 942-961.
[13] Gonenc H, Aybar CB. Financial crisis and firm performance: empirical evidence from Turkey, Corporate Governance: An
International Review, 14(4), 2006, p. 297–311.
[14] Selcuk F, Ardic OP. Learning to live with the float: Turkey’s experience 2001-2003, Forthcoming in Contemporary Issues in
International Finance, F. Columbus (ed.), Nova Science Pub., NY, 2004.
[15] Rawdanowicz L. The 2008-09 crisis in Turkey: performance, policy responses and challenges for sustaining the recovery
economics, Department Working Paper No. 819, 2010, p.1-30.
[16] Tong H, Wei SJ. Real effects of the 2007-08 financial crisis around the world, 2009. available at http://www.finance-
innovation.
[17] Akbulut R. Son yaúanan küresel finansal kriz ve türk finans sektörü üzerindeki etkileri, Akademik Araútırmalar ve Çalıúmalar
Dergisi, Journal of Academic Researches and Studies, 2(2), 2010, p.45-68.
[18] Danaci CM, Uluyol O. En son yaúanan küresel finansal krizin türkiye ekonomisine etkilerinin iúletmeler bazında
de÷erlendirilmesi ve bir örnek olay, 1. Uluslararası Turgut Özal Siyaset ve Ekonomi Kongresi, 15-16 Nisan, ønönü Üniversitesi,
Malatya, 2010.
[19] Mitroff IP, Christine M. From crisis prone to crisis prepared: a framework for crisis management, Academy of Management
Executive, 7 (1), 1993, p. 48-59.
[20] Ang SH, Leong SM, Kotler P. The asian apocalypse: crisis marketing for consumers and businesses, Long Range Planning,
Volume 33, Issue 1, 2000, pp 97-119.
[21] Koksal MH, Ozgul E. The relationship between marketing strategies and performance in an economic crisis , Marketing
Intelligence & Planning, 25(4), 2007, p. 326 – 342.
[22] Srinivasan R, Rangaswamy A, Lilien G. Turning adversity into advantage: does proactive marketing during a recession pay
off?, International Journal of Research in Marketing, 22(2), 2005, p. 109-125.
Aykan Candemir and Ali Erhan Zalluhoglu / Procedia Social and Behavioral Sciences 24 (2011) 291–299
299
[23] Zehir C. The activation level of crises and the change of strategic targets of enterprises in turkey during the depression era,
Journal of the American Academy of Business, 5(2), 2005, p.293-9.
[24] Roberts K. What strategic investment should you make during a recession to gain competition, Strategy & Leadership, 31(4),
2003, p. 31-9.
[25] Shama A. Marketing strategies during recession: a comparison of small and large firms, Journal of Small Business
Management, July, 1993, p. 62-72.
[26] Pearce JA, Michael SC. Marketing strategies that make entrepreneurial firms recession-resistant, Journal of Business
Venturing, 12 (4), 1997, p. 301-314.
org/risk09/work/1201504.pdf. Access data: 23.03.2011
[27] Dinner IM, Mizik N, Lehmann D R. The unappreciated value of marketing: the moderating role of changes in marketing and
R&D spending on valuation of earnings reports, MSI Working Paper, 2009.
[28] Chambers D, Jennings R, Thompson RB. Excess returns to R&D intensive firms, Review of Accounting Studies, 7, 2002,
p.133-158
[29] Brenner MS, Rushton BM. Sales growth and R&D in the chemical industry. Research Technology Management, 32(2), 989, p.
8-15.
[30] Dugal SS, Morbey GK. Revisiting corporate R&D spending during a recession, Research Technology Management, 38(4),
1995, p. 23–7.
[31] Morbey GK, Reithner R. How R&D affects sales growth, productivity and profitability, Research Technology Management,
33(3), 1990, p. 11-4.
[32] Ho YK, Keh HT, Ong JM. The effect of R&D and advertising on firm value: an examination of manufacturing and
nonmanufacturing firms, IEEE Transactions on Engineering Management, 52, 2005, p. 3–14.
[33] IGEME (Investment Support and Promotion Agency of Turkey), Turkish food & beverage industry report, 2010.
[34]Yaffee RA. A primer for panel data analysis. September, 2003, p.10. (Available at:
www.nyu.edu/its/pubs/connect/fall03/pdfs/yaffee_primer.pdf). Access data: 24.03.2011
[35] Springer WL. Consumer spending and the rate of ınflation the review of economics and statistics, 59(3), 1977, p. 299-306.
[36] Asıkoglu, R, Ogel, S. 2001 krizinin IMKB’de hisse senetleri iúlem gören imalat iúletmelerinin finansal yapısı üzerindeki
etkileri, Afyon Kocatepe Üniversitesi I.I.B.F. Dergisi, 8(2), 2006, p.1-18, available at
http://www.allbusiness.com/management/change-management/779186-1.html. Access data: 20.03.2011
[37] Ekinci N, Erturk K. Turkish currency crisis of 2000-1, Revisited, CEPA Working Paper Series, No. 2004-01.
[38] Ozatay F, Sak G. The 2000–2001 financial crisis, Paper presented at the Brookings Trade Forum 2002: Currency Crises, 2002,
p.1-39
... In this perspective, investors are more likely to purchase stocks of companies with strong brands since brand recognition increases the company's visibility and familiarity among investors and may reduce information asymmetries in the market (Grullon et al., 2004;Kallapur and Kwan, 2004). Besides these models, the advertising effectiveness models emphasize the positive impact of advertising on sales and market share of a company, so advertising and other marketing variables have a positive effect on the sales of companies (Corvi & Bonera, 2010;Candemir & Zalluhoglu, 2011). ...
... In emerging markets global economic crises can be a fundamental problem that can lead to severe drops in the gross domestic product and deteriorations in financial statements or even bankruptcy of some financial institutions (Candemir & Zalluhoglu, 2011). In the emerging markets context, research shows that marketing expenditures have significant effects on sales especially in and after the financial crisis periods (Candemir & Zalluhoglu, 2011). ...
... In emerging markets global economic crises can be a fundamental problem that can lead to severe drops in the gross domestic product and deteriorations in financial statements or even bankruptcy of some financial institutions (Candemir & Zalluhoglu, 2011). In the emerging markets context, research shows that marketing expenditures have significant effects on sales especially in and after the financial crisis periods (Candemir & Zalluhoglu, 2011). ...
Article
Full-text available
The technology-based global competition environment that pushes businesses to constructive transformation in order to ensure customer satisfaction has further increased the importance of marketing capabilities in business strategies. The purpose of the literature review is to summarize the previous studies about marketing-financial performance nexus. Studies that were published between 1969 and 2019 could be reached from the EBSCO database were included in the literature review. A significant number of studies conducted in different countries have shown that marketing spending is an investment that creates value for the company and has a positive impact on firm profitability, firm value or firm sales. This study contributes to the literature by summarizing the research findings on the effects of marketing investments on business performance.
... As discussed in Chapter Three -Methodology 24 ; the research project utilises a descriptive approach, advantages and disadvantages have been discussed, additionally a mixed methods approach is utilised to analyse numbers in the research through the use of quantitative 25 approach and providing information and supporting arguments for and against the topic through a qualitative approach 26 , again advantages and disadvantages were discussed of using a mixed methods approach. 24 Refer to Chapter Three -3.2 25 Aliaga and Gunderson (2006) and Boru (2018), describe quantitative research as an approach explaining a phenomena by collecting numerical data that are analysed using statistical approaches (Aliaga andGunderson, 2006 andBoru, 2018). 26 Qualitative research is used to identify how people understand and experience the world around them (Bhandari, 2020) ...
Thesis
Full-text available
In a time of a pandemic it is of utmost importance businesses and society as a whole, display resilience, creativity through innovation, integration, steadfastness and courage to navigate, and overcome challenges imposed by a pandemic. This research project investigated how businesses have seen transformations from previous process, operations and procedures, to transformations of marketing techniques and tactics. In addition, transformations consumers have undergone during the pandemic from a behavioural, as well as a cognitive standpoint as a result of the pandemic. In the same token, utilisation of online channels has provided an exclusive prospect to develop the search for product–market appropriateness, and discover new business models proficient in surviving and blossoming in the world of a pandemic. The pandemic in question is the novel Coronavirus, more generally classified as COVID-19 (or more scientifically; SARS-CoV-2 Virus) which was defined with business and marketing. This research project utilises a mixed methods approach, as well as the use of two questionnaires, the results were presented in a quantitative alongside a qualitative method, with a descriptive research design which was used to draw conclusions, and was processed using Single User Programming in conjunction with Survey Monkey. Results showed consumers have paid more attention to transformations in businesses, and procedures, and marketing as a result of COVID-19 due to the fact businesses have had to integrate clever marketing tactics. Moreover, consumers conformed to online adoption with use of Social Media and various other virtual platforms, as businesses innovated such platforms during COVID-19. Businesses have also used many strategies to ensure continuity during the pandemic, provision of other strategies was also discussed in the research project. Lastly, recommendations and suggestions are provided to improve research processes and procedures for future reference.
... Whilst the GFC occurred in the U.S., the ramifications and fallout were felt across the world (Pond, 2009). For example, the GFC was a large contributor to distrust in banks worldwide and emerging economies experienced a GDP drop from 8.8% in 2007 to 0.4% in 2008 and OECD countries experienced a staggering 9% unemployment rate (Candemir and Zalluhoglu, 2011;Lessambo, 2020). A unique trait to the U.S. banking system is that smaller banks and large-scale commercial banks coexist, with smaller banks the larger share (Lessambo, 2020). ...
This study seeks to examine and unearth antecedents to co-creation behaviours within a U.S. retail banking context. A critical aspect for marketing managers and academics alike, co-creation has a strong influence on tangible factors such as profit and intangible factors such as referrals, satisfaction and feedback. Antecedents were identified as trust, customer engagement and participation attitude whilst social media usage was a consumer characteristic identified as influencing co-creation. Data was collected from 489 U.S. retail banking customers via an online survey. The data was analysed via structural equation modelling. The findings indicate that customer engagement influences trust, co-creation and participation attitude. Participation attitude was found to influence trust and co-creation but trust had no direct effect on co-creation. The study further found that social media usage intensity influenced co-creation behaviours. The findings contribute in three ways. First, this is one of the first studies to scrutinise participation attitude in an attempt to explain co-creation behaviours for U. S. banks over social media. Second, identification of precursors to value co-creation has been ascertained in a U. S. retail banking social media context. Third, the study additionally contributes to the findings that social media usage has a moderating effect in value co-creation and offers a potential segmentation strategy.
... In each of the themes, moreover, Eugenio & Campos (2014) and Nikolaos (2018) added one theme which Information Technology. On other hand Candemir & Zalluhoglu (2011) add more one theme which is Cooperative Initiatives, practices relevant to the crisis in the hospitality industry was listed. Itineraries, distances, news, photo gallery, GPS. ...
... Unemployment that can be reduced will have a significant effect on decreasing the income inequality ratio. This opinion is in line with the results of research (Lavrinovicha et al., 2015;Kim, 2016;Raišienė et al., 2014;Li & Hu, 2015;Bouwmeester & Scholtens, 2017;O'Campo et al., 2015;Bouwmeester & Scholtens, 2017;Shen et al., 2018;Mihaiu & Opreana, 2013;Candemir & Zalluhoglu, 2011;Nguyen, 2019). However, there are different opinions expressed by (Adriana, 2014;Roşoiu, 2015) However, there are different opinions expressed (Han et al., 2015) arguing that government spending with a different constitutional system also had a significant impact on income inequality and economic growth. ...
Article
Full-text available
This study sees a critical gap in the previous body of research, which it seeks to fill; the disclosure of the unemployment ratio correlation has only been measured by the level of economic growth. This study is to add investment variables and government expenditure variables that objectively aim to measure the level of effectiveness in handling the unemployment ratio, which is then a measurement of the effectiveness of unemployment. Economic growth is measured by its impact on income inequality through empirical, conceptual relationships as a critical review and economic strategy for the future. The research uses secondary data on Indonesian macro and microeconomics since 2003-2018, then testing uses a quantitative approach to correlation, regression, and scatterplot. The results of this study show correlations between variables, and volatiles on the graphs show a similar trend. In other words, variables are bound together and support each other. The strategy of prioritizing the scale of government expenditure and investment to reach the target is the primary concern, so that the economic cycle can be optimal and equipped to face the possibility of an economic recession in the future. Many factors cause complex income inequality, though investment does not show a correlation to income inequality.
... Además de la venta directa, el hotel cuenta con el apoyo de las Agencias de Viaje Online (OTAs 7 ) y operadores para la divulgación y venta de sus servicios, con destaque para Booking, Despegar, TripAdvisor y Trend. Esta visión corrobora lo recomendado en la literatura internacional sobre el uso de la estrategia de marketing en el enfrentamiento de crisis (Candemir & Zalluhoglu, 2011;Hamdani & Wirawan, 2012;Koksal & Ozgul, 2007) y las alianzas con las OTAs (Martin & Isozaki, 2013). ...
Chapter
Full-text available
This paper aimed to understand the strategies of firms in the hospitality industry of São Luís to deal with the economic crisis. The specific objectives are: to identify the main factors that contributed to the crisis in the tourism and hospitality industry; and to identify the strategies adopted to deal with the crisis. The methodology developed was qualitative and based on the Multiple Case Study. In-depth interviews were conducted with managers of three firms of the hospitality sector (small, medium and large scales) located in São Luís do Maranhão. Findings show that the main strategies are the effective management of resources and of the human talents, and the strategies adopted vary according to the typology, size and management of firms. Key-Words: Crisis Management; Strategy; Hospitality Sector; São Luís do Maranhão.
... Además de la venta directa, el hotel cuenta con el apoyo de las Agencias de Viaje Online (OTAs 7 ) y operadores para la divulgación y venta de sus servicios, con destaque para Booking, Despegar, TripAdvisor y Trend. Esta visión corrobora lo recomendado en la literatura internacional sobre el uso de la estrategia de marketing en el enfrentamiento de crisis (Candemir & Zalluhoglu, 2011;Hamdani & Wirawan, 2012;Koksal & Ozgul, 2007) y las alianzas con las OTAs (Martin & Isozaki, 2013). ...
Article
Full-text available
En este trabajo se buscó conocer las estrategias de los alojamientos turísticos en São Luís do Maranhão, Brasil, para reaccionar ante la crisis actual en el sector. Los objetivos específicos fueron: Identificar los principales factores que contribuyeron a la crisis en el turismo y en la hostelería del destino; Identificar las medidas adoptadas por los Hosteleros para gestionar la crisis. Esta investigación es cualitativa y se utilizó el método de Estudio de Casos Múltiples, en el que se realizaron entrevistas en profundidad con gestores de tres alojamientos turísticos de diferentes tamaños (pequeño, medio y grande) ubicados en São Luís. La técnica utilizada fue la de Análisis de Contenido. Los resultados centrales demostraron que las principales estrategias implementadas por los gestores se relacionan con la gestión de calidad, marketing, costes y talentos, al mismo tiempo que se refieren a las estrategias de liderazgo en coste y diferenciación. Además, las estrategias varían de acuerdo con la tipología, tamaño y administración de las empresas estudiadas. Por último, se presentan limitaciones del trabajo y una agenda de investigación.
Article
Bu çalışmada, BİST’de hisse senetleri işlem gören ve Gıda, İçecek ve Tütün sektöründe faaliyet gösteren 18 şirketin 2011-2019 yılları arasına ait verileri yardımı ile reklam harcamalarının karlılık ve net satışlardaki büyüme üzerine etkisi incelenmiştir. Çalışmada Sistem GMM analiz yöntemi kullanılmıştır. Analiz sonucunda; reklam harcamaları ile karlılık ve satışlardaki değişim arasında pozitif anlamlı ilişki olduğu tespit edilmiştir.
Article
Full-text available
Panel data analysis is an increasingly popular form of longitudinal data analysis among social and behavioral science researchers. A panel is a cross-section or group of people who are surveyed periodically over a given time span. In this article, we will consider a small sample of panel data analytic applications in the social sciences. Then we will address the data structure for panel analysis. Principal models of panel analysis will be summarized, along with some of their relative advantages and disadvantages. We will discuss a test to determine whether to use fixed or random effects models. After a synopsis of methods of estimations tailored to different situations, we will conclude with a brief discussion of popular software capable of performing panel analysis. Some Applications of Panel Analysis Panel data analysis is a method of studying a particular subject within multiple sites, periodically observed over a defined time frame. Within the social sciences, panel analysis has enabled researchers to undertake longitudinal analyses in a wide variety of fields. In economics, panel data analysis is used to study the behavior of firms and wages of people over time. In political science, it is used to study political behavior of parties and organizations over time. It is used in psychology, sociology, and health research to study characteristics of groups of people followed over time. In educational research, researchers study classes of students or graduates over time. With repeated observations of enough cross-sections, panel analysis permits the researcher to study the dynamics of change with short time series. The combination of time series with cross-sections can enhance the quality and quantity of data in ways that would be impossible using only one of these two dimensions (Gujarati, 638). Panel analysis can provide a rich and powerful study of a set of people, if one
Article
Full-text available
For less developed countries, having short-term economic crisis is one of the most fundamental problems for the last 10-15 years. It is not an unusual event when we consider the crisis that has happened in less developed countries in previous periods. But in some aspects there are some main differences between these recent crisis and the previous ones .In previous crisis the main problems were about balance of foreign payments and inflation. On the other hand, the recent crisis has been related to the instability of the international capital movements that are the consequence of the steps for the liberality. Furthermore they impact finance markets, real sector and socioeconomic indicators. They affect not only the countries it emerged in, but also the whole world. Therefore it reaches a dimension that affects the international finance system. Recently the most important economical and financial short-term crisis emerged in Turkey are the ones that happened respectively in 1994, 2001 and 2008.The aim of this work is to evaluate and analyze these important crisis in the axis of the World, relating to Turkey.
Article
The world appears to be beginning to recover from the global recession that is causing widespread business contraction, increases in unemployment, and shrinking government revenues. Although the industrialized economies have stopped contracting, for many, unemployment is still rising. The United States likely hit bottom in June 2009, but numerous small banks and households still face huge problems in restoring their balance sheets, and unemployment has combined with sub-prime loans to keep home foreclosures at a high rate. Nearly all industrialized countries and many emerging and developing nations have announced economic stimulus and/or financial sector rescue packages, such as the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). Several countries have resorted to borrowing from the International Monetary Fund as a last resort. The crisis has exposed fundamental weaknesses in financial systems worldwide, demonstrated how interconnected and interdependent economies are today, and has posed vexing policy dilemmas. The process for coping with the crisis by countries across the globe has been manifest in four basic phases. The first has been intervention to contain the contagion and restore confidence in the system. This has required extraordinary measures both in scope, cost, and extent of government reach. The second has been coping with the secondary effects of the crisis, particularly the global recession and flight of capital from countries in emerging markets and elsewhere that have been affected by the crisis. The third phase of this process is to make changes in the financial system to reduce risk and prevent future crises. In order to give these proposals political backing, world leaders have called for international meetings to address changes in policy, regulations, oversight, and enforcement. On September 24-25, 2009, heads of the G-20 nations met in Pittsburgh to address the global financial crisis. The fourth phase of the process is dealing with political, social, and security effects of the financial turmoil. One such effect is the strengthened role of China in financial markets. The role for Congress in this financial crisis is multifaceted. While the recent focus has been on combating the recession, the ultimate issue perhaps is how to ensure the smooth and efficient functioning of financial markets to promote the general well-being of the country while protecting taxpayer interests and facilitating business operations without creating a moral hazard. In addition to preventing future crises through legislative, oversight, and domestic regulatory functions, On June 17, 2009, the Department of the Treasury presented the Obama Administration proposal for financial regulatory reform. The proposal focuses on five areas and includes establishing the Federal Reserve as a systemic risk regulator, creating a Council of Regulators, regulating all financial derivatives, creating a Consumer Financial Protection Agency, improving coordination and oversight of international financial markets, and other provisions. Treasury also has submitted to Congress proposed legislation to implement the reforms. The reform agenda now has moved to Congress. Legislation in Congress addresses many of the issues in the Treasury plan but also may focus on other financial issues. Congress also plays a role in measures to reform and recapitalize the International Monetary Fund, the World Bank, and regional development banks.
Article
Successful product and process R&D should translate into improved company performance. We would hope that this would be particularly evident in periods of recession when new products or more efficient processes should shield a company from economic decline. This study over two recessions shows that companies that invest heavily in R&D continue to grow while competitors with modest investment suffer sales declines. Model analysis shows that these results are not influenced by company size, type of ownership, or market structure.
Article
The conduct of policy under floating exchange rates is becoming an increasingly important concern for developing countries. The challenge facing the central banks is to contain the volatility of the exchange rate while achieving lowinflation and stimulating output growth. As a complement, the governments must implement sound policies to bring the fiscal and legal environments close to those of the advanced economies so as to enhance long-term economic growth. One recent example of an emerging economy that confronts this challenge is Turkey with a history of high inflation and a collapse of a fixed exchange rate based stabilization program that resulted in a marketforced devaluation. After a review of the literature, this chapter analyzes the developments in the foreign exchange market in Turkey in light of the Central Bank's policies during the floating exchange rate system between February 2001 and November 2003. The results indicate that the Central Bank had been successful in containing volatility and reducing the average inflation rate. However, the accumulated risks in the economy, such as the extreme appreciation of the currency and high real interest rates make the system vulnerable to adverse shocks.
Article
Recession is a phenomenon of decreas-ing demand for raw materials, products, and services. Technically, its beginning, progress, and ending depend on the op-erational measures used by different re-searchers and federal agencies. For example, in the United States a reces-sion is said to exist when the gross na-tional product (GNP) declines for two consecutive quarters, or when the lead-ing economic indicators (LEIs) decline for three straight months, or when the index of the Association of Purchasing Managers dips below 50 points. Which-ever the case, recession requires market-ing managers to modify their marketing strategy and action in order to stay both profitable and consumer-responsive. This generally means adapting the mar-keting mix and/or changing the target markets. However, the response of marketing managers to recession depends on how they perceive its meaning and impact on their businesses. As a result, it is possi-ble that a recession on the national level may affect different companies differ-ently and may, in fact, indicate different economic environments, including those of growth and inflation. Specifically, an objectively measured and determined recession on the national level may af-Dr. Shama is a professor of management at the Anderson Schools of Management, the University of New Mexico, Ai-buquerque. His research interests are in marketing, eco-nomic development, management transformation in Russia and Eastem Europe, and small business strategy. feet companies of different size and dif-ferent sectors and regions differently, hence requiring that marketing man-agers take different tactical and/or stra-tegic measures to adjust to or even exploit changes in the economic envi-ronment. This article seeks to determine man-agement perception of and response to economic recession by measuring the following and contrasting the results by sector and by company size: (1) The meaning of the 1991 economic recession to marketing managers, (2) The impact of this recession on marketing decisions, and (3) The resulting adjustments in mar-keting strategy and action. A fourth goal of this article is to make recommendations to marketing man-agers, which may be especially useful to those in small businesses. By accom-plishing the goals of this article, the study will make a bridge between the scholarly marketing literature and daily or weekly reporting on marketing and economic performance.