Impact of advertising and sales promotion expenses on the sales performance of Jordanian companies: The moderating role of firm size

Abstract

This study aimed at analyzing the effect of sales promotion and advertising expenses on sales performance, considering firm size as a likely moderating variable.This research conducted regression analyses on 474 Jordanian companies based on the firm’s advertising expenditure, gross margin, firm size, and sales performance. It tested two models: first, direct impact of advertising expenses on sales performance, and, second, firm size affecting the relationship between advertising expenses and sales performance.The findings show that advertising and sales promotion expenses do not have a significant effect on sales performance. Besides, firm size did not moderate this relationship, as referred by a non-significant t-value of –1.459 and a p-value of 0.145. The models explained only 4.1% and 0.5% of the variance in sales performance, respectively, suggesting that other factors play a more significant role.These results suggest that Jordanian firms have to reevaluate their advertising strategies and consider alternative approaches to enhance sales. The research contributes to more understanding of the limited role of advertising in sales performance within the Jordanian market. AcknowledgementThis research was funded through the annual funding track by the Deanship of Scientific Research, from the vice presidency for graduate studies and scientific research, King Faisal University, Saudi Arabia [Grant no. KFU242402].

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