Role of Advertising Agencies in Raising Marketing Efficiency of Private and Public Sector Enterprises in Bangladesh

Abstract

We know that marketing mix of both private and public organizations comprises mainly product, place, price and promotion. Difficulties are faced regarding product variety, quality, design, brand name, packaging, warranties and returns etc. Pricing factors like list price, discount, allowance, pay period, credit terms are also problematic in own organizations. Promotional activities are mainly advertising, sales promotion, public relations, salesmanship need to be well planned. Place difficulties are solved through covering easy channel assortments, good transport and inventory control. However, our nationalized organizations have chronic situation of net losses. As a result many of the units were denationalized after 1982. Even then their difficulties are not over. Private sector organizations have also problems in marketing their quality Products and services due to market economy and cost inefficiency, unfair competition and political instability. The major objectives of the study are: To examine how effectively the advertising agencies perform their activities towards raising marketing efficiency of private and public banking sector enterprises in Bangladesh, to judge the effectiveness of the companies advertisements on the basis of relationship existing between advertising experience and loan performance, to evaluate the impact of advertising expenses on the organization performance both by qualitative and quantitative approaches and to provide suggestions for developing marketing strategies regarding selection of advertising firms, using their services, monitoring their role towards the achievement of management goals of concerned enterprises. In modern business world advertising industry plays vital role. It is a big business itself. It performs the functions of communication between producers and consumers. It builds brand image, consumer’s awareness about products and services. At the moment the advertising industry employs thousands of people. Hence any research in this field is important. This study will provide students and academicians with understanding of the advertising industry. It is expected by the researcher that the result of this study will help the company concerned to measure the effectiveness of its advertisement policy and judge the attitude of the customers towards the same. Moreover, it may guide the private and public company executives to allocate reasonable amount of budget for advertisements to be pursued in future and thus ensure better outcome of advertising policy in the form of better sales performance. Various studies are reviewed and based on the review, the major hypotheses are that, the advertising expenditure of various media is not correlated with managerial performance indicators (i.e., deposit, loan and advances, investments, gross income, gross expenditure and net profit) for different banks, there is no variation in Managerial Performance Indicators like (Deposit, Loan and Advances, Investments, Gross Income, Gross Expenditure and Net Profit) among banks, there is no variation in advertising expenditure among the sample banks. Some other hypotheses based on primary data are detailed in the text. The sample of the study covers 10 commercial Banks and 20 advertising agencies in Bangladesh. The study follows both primary and secondary data. Two sets of interview schedule are used. The analysis follows means values, Standard Deviation (SD), Coefficient of Variation (CV), Correlation, regression and Analysis of variance (ANOVA) to test the Hypotheses. Major findings of the study are that there is a correlation between the advertising expenditure of various banks and the indicators of the corresponding bank’s managerial performance. Let us first consider UCB. We observe that the advertising expenditure is highly significantly positively correlated with deposit, the value of correlation coefficient is 0.963 with probability 0.008 followed by the loan and advances (the value of correlation coefficient is 0.936 with p=0.019). The advertising expenditure is also significantly correlated with gross income (r=0.903 with p=0.036) and gross expenditure (r=0.895 with p=0.04). The advertising expenditure is also significantly correlated with investment with 6% level of significant (r=0.874 with p=0.053). There is no significant correlation observed between advertising expenditure and Net Profit for UCB……………………………..