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| The Sufficiency of the Advertising Budget to Generate Revenue for the Resorts in the City of San Jose Del Monte, Bulacan: Basis for Setting Local Industry Advertising-To-Sales Ratio
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Ramrel F. A?onuevo, MBA, Madeline Absalon, MBA, Edelita Lazaro, MBA
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Abstract:
Tourism is one of the aggressive and fast-growing industries in the Philippines contributing significantly to its economy. As an industry in monopolistic competition, advertisement plays an important role to compete by emphasizing product differentiation. The resort is one of the aggressive tourism-related establishments investing in advertisement activities to gain a competitive advantage in the market. This mixed-method study conducted in the rising City of San Jose del Monte, Bulacan employed interview and document analysis to study the advertisement spending and revenue of the four (4) largest resorts of the local industry. Findings revealed that respondent-resorts are engaged in print, social media, and other media advertisements to inform and attract guests. Furthermore, the researchers discovered that respondents are spending an average of P731,250.00 annual advertisement budget and generated an average of P10,998,486.67 annual revenue for the past three years (2017-2019). The study also proved that the response function of advertising-to-sales is in a concave downward function curve as described by the economic marginal analysis anchored with the law of diminishing return. The computed advertising-to-sales ratio of the industry recommends that resorts should allocate 6.65% of their annual revenue to finance advertisement activities. The researchers also recommended that this study can be replicated to determine the advertising-to-sales ratio of other forms of integrated marketing communications: promotion, events marketing, publicity and public relations, personal selling, and direct selling
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