International Journal of Costume and Fashion

The Korean Society of Costume (한국복식학회)
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The Effects of Advertising Expenditure on Sales in Fashion Companies

  • Ji, Hye Kyung (School of Global Fashion Industry, Hansung University)
  • Received : 2017.04.18
  • Accepted : 2017.06.12
  • Published : 2017.06.30
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Abstract

The objective of this study is to investigate the effects of advertising expenses of fashion companies on sales from a financial viewpoint. To do so, the advertising expenses and the sales of 194 manufacturing and distribution companies in the fashion industry, as per the income statements posted by the individual companies, were analyzed. The results are as follows. First, there was a statistically significant correlation between advertising expenses and sales. The higher the advertising expenses, the higher the sales. Second, there was no statistically significant differences between companies with different sizes of sales. Third, the effects of advertising expenses on sales of fashion companies were statistically significant. The higher the increase of the ratio of advertising expenses, the higher the increase of the ratio of sales, and vice versa. This study differs from others in that it uses financial data, which has been neglected in previous studies regarding the fashion industry, to analyze the relationship between advertisement and sales. It will lend help to fashion companies seeking to rationally manage advertising expenses and come up with effective advertising policies.

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