Marketing Communication Strategies and their Effect on Business Performance

Abstract

The pharmaceutical industry is crucial to the global economy and the welfare of its citizens. The pharmaceutical industry is fueled by innovation and spends more money on marketing than research and development. The majority of the studies focus on the soft outcome variable (say, physicians' prescription behavior), however, very few of the researchers examine the impact of pharmaceutical promotional expenditures on sales and profitability. Therefore, in this particular study, the impact of promotional expenditures is determined on the sales and profitability of the Pakistan pharmaceutical industry grounded on the AIDA (Attention, Interest, Desire, and Action) model and profit maximization theory. The Pakistan Stock Exchange lists 12 pharmaceutical businesses out of which 6 are multinationals. Stratified random sampling is used to select 50% of companies from each stratum. Financial statements of the selected companies are utilized to gather and organize the data regarding promotional expenditures, sales, and profitability. Software such as SPSS and MS Excel are utilized for data administration and analysis. Moreover, trend analysis (using line charts) and regression analysis were used as data analysis techniques. The findings show that promotional spending significantly improves sales and profitability which highlights the significance of promotion in Pakistan's pharmaceutical industry.