Essays on the reaction of financial markets to two marketing investments: Sports sponsorships and sales force sizing.

详细信息   

• 作者：Myer ; Duane W.
• 学历：Ph.D.
• 年：2013
• 导师：Joseph, Kissan,eadvisorLessig, V. Parkerecommittee memberRosen, Dennis L.ecommittee memberWintoki, M. Babajideecommittee memberPeyton, Vickiecommittee member
• 毕业院校：University of Kansas
• Department：Business
• ISBN：9781303315169
• CBH：3591096
• Country：USA
• 语种：English
• FileSize：3042068
• Pages：78

文摘

From what perspective should marketings effect on shareholder wealth be approached? In this research, an event-study approach is taken to examine two distinct marketing actions and the subsequent impact on the firms stock prices. The first is an inter-industry study where firms are announcing a sponsorship agreement with a major sports league. The second is an intra-industry study where pharmaceutical firms announcing a plan to either increase or decrease the size of its sales force. Agency Costs in Marketing Investments: The Case of Sports Sponsorships examines the role of agency costs in a particular marketing investment - sports sponsorships - that has largely been overlooked in academic research. Given the possibility of private consumption associated with these marketing investments, the basic objective in this research is to obtain a better understanding of the role and management of agency costs in this large and visible marketing investment. Accordingly, this study will look at Wall Streets reaction to sponsorship announcements related to the big four major professional sports leagues in the United States: Major League Baseball, the National Football League, the National Basketball Association, and the National Hockey League. The results indicate a statistically significant positive stock market reaction to announcements of sports sponsorships 0.90%, t ＝ 2.12, p ＝ 0.02), with a mix of both positive and negative returns. In the cross-section, there is evidence for agency costs. In particular, the abnormal return is dampened at firms that have high levels of free cash flow. It is also negatively related to the popularity of the sport with which the sport is associated. I posit that the former effect arises due to agency costs associated with the misuse of excess cash while the latter effect is due to the increased benefits of private consumption. Further, the abnormal return is enhanced with prior performance as measured by market-to book as well as the strength of governance mechanisms at the firm. The study concludes with implications for managing investments in sports sponsorships. The Information Content of Marketing Investments: The Case of Sales Force Resizing Announcements is concerned with the ability of marketing investments to convey information from the "black box" of the firm to participants in the financial markets. It focuses on the context of sales force resizing announcements in the pharmaceutical industry because the sales force comprises the main marketing instrument for firms in this industry. It is hypothesized that sales force resizing announcements will generate a concomitant market reaction because they provide information about future demand. Moreover, it is predicted stronger absolute effects for "increase" announcements than for "decrease" announcements. This is because the mean-shifting and uncertainty reducing aspects of new information work in concert for increase announcements, but in opposing ways for decrease announcements. The theory also predicts a more pronounced market reaction when investors are more uncertain about the firms future performance and the announcement contradicts the direction of investors prior beliefs. Employing an event-study analysis, an unusually strong two-day market reaction of 3.2% is found for increase announcements and no significant market reaction for decrease announcements. The hypothesized effects with respect to uncertainty and direction of investors prior beliefs are also supported. It concludes by discussing implications for managing the investor relations function.