Determinants of the Marketing Budget Allocation Process across Countries Using Artificial Neural Network Classification: Japan, Germany, United States: An Abstract

Abstract

Marketing managers have continued to grapple with the transitory targets of what are the most efficient and effective levels of marketing and sales expenditures given optimal return. Numerous studies suggest that there is a correlation between marketing and sales budgets and firm performance, however marketing scholars have been slow to integrate managerial relevance when decision making (Fischer et al. 2011). In addition, little cohesive research results suggest marketing allocation optimization in varying product categories or geographic regions. Moreover, there appears to be little consensus as to the identification of consistent input firm or customer level variables consistently associated with favorable outcomes and good practice. The proposition here is a firm level examination of variables with a particular effort to confirm impact on firm and marketing performance measurements across cultural settings. Specifically, a sample of 722 retail trade firms from Japan, Germany and the United States are empirically analyzed in an attempt to answer the following primary questions: (a) Does a common set of high ranking determinants for Maximum Net Marketing Contribution exist among retail trade firms from the examined countries, combined? (b) Does a unique set of high-ranking determinants for Maximum Net Marketing Contribution exist within the retail trade firms from each country, individually? The specific proposition results are as follows: (P1) A common set of high-ranking export determinants for Maximum Net Marketing Contribution exists among service firms from Japan, Germany and the United States combined. This was affirmed as Firm Sales Growth Rate (fsg), Change in Marketing Budget to Sales (cmbs), and Product Price Position (ppp) were all extracted demonstrating significant feature identification with Maximum Net Marketing Contribution. (P2) A unique set of high-ranking export performance determinants for Maximum Net Marketing Contribution exists within retail trade firms from Japan, Germany and the United States individually. This was also affirmed as unique features from each country were extracted. Japan variables included Firm Asset Size (fas) and Firm Revenue Size (frs), Germany included Marketing Budget to Sales (mbs) and Regional Business Cycle (rbc), and the United States included Domestic Market Share (dms). The study is useful because it: (1) fills a void in the research area of organizational behavior and optimal marketing resource allocation; (2) identifies particular organizational determinants associated with Maximum Net Marketing Contribution across diverse cultures; (3) employs a statistically sophisticated non-linear technique for classification, offering an alternative approach for analysis.