Marketing Expenses & Profitability: Evidence from Telecom Sector in Kingdom of Saudi Arabia

Abstract

The study focuses on statistical significance of the relationship of Selling & Marketing Expenses with profitability of all the listed Telecom companies in Kingdom of Saudi Arabia for a period of 4 years (2011 -2014), with a total of 16 firm years. Multiple Correlation & Regression Analysis were used to test the effectiveness. Gross Operating Profitability (GOP) is used as dependent variable. Four independent variables were used. There is a positive correlation among all the independent variables i.e. the selling and marketing expense, dealers’ commission, advertising expenses and salary, wages, employee benefits paid to the selling and marketing staff of these companies. There is no significant impact of Selling & Marketing Expenses on Gross Operating Profitability. However,  other components of Selling and Marketing Expenses viz. dealers commission, advertising expenses, salary, wages and employees benefit expenses  have significant effect  on the profitability of the these firms.

Keywords: KSA, Profitability, Selling & Marketing Expenses, Telecom