Advertising Spending, Competition And Stock Return

Marketing decision makers are increasingly aware of the importance of shareholder value maximization, which calls for an evaluation of the long-run effects of their actions on product-market response as well as investor response. However, the marketing literature to date has focused on the sales or profit response of marketing actions such as advertising spending and new-product development, and the goals of marketing have traditionally been formulated from a customer perspective. There have been no studies of the long-term investor response to marketing actions, in particular the stock returns of publicly traded firms.