THE IMPACT OF ACTIVITIES AND PROMOTIONAL TACTICS ON BUSINESS PERFORMANCE OF COMPANY

<p><strong>Abstract</strong></p><p>This work is intended to show the effects of price and promotional activities on company&rsquo;s effectiveness and growth of its shareholder value. The basic model of such impact was built. It has been proven the dependence of prices and discounts on the firm&rsquo;s value through operating performance. Empirical study was conducted with the construction of regression models. It has been found that described indicators have positive relations, which were installed and digitized. It has been proposed the policy options for optimizing prices and discounts for better performance. The potential effect of increasing value through the described activities was quantified.</p><p><strong>The theoretical part</strong></p><p>A review of the specific literature helped to assess the impact of marketing on shareholder value. Srivastava, Shervani, Fahey (2001) model that describes the chain of influence: Marketing Assets - Market - Cost firm results was chosen as a theoretical basis. This model was converted with inclusion marketing processes. On the author&rsquo;s opinion they ought to be included in model as a new link between the marketing assets and marketing results. The Peter Doyle&rsquo;s (2001) model of shareholder value from financial sources was analyzed. It showed the relations between marketing and the company&#39;s value through the operating activities in increasing margins and volume of goods sold. There were made two hypotheses during the estimation of two present models:</p><p><strong>H1</strong>. Marketing activities relating to price changes can affect shareholder value.</p><p><strong>H2</strong>. Marketing activities of sales promotion can affect shareholder value.</p><p>Scientific novelty is to extend the basic theoretical models, introducing specific marketing processes and consideration of their impact on the firm&rsquo;s value. Moreover the idea of ​​assessing the impact of price and promotions on shareholder value is unexplored.</p><p>The basic price, discount metrics and financial indicators were systematized and characterized.</p><p><strong>The practical part</strong></p><p>A public company Adidas AG which shares are listed on the Frankfurt International Exchange was served as an object for current study.</p><p>The model of the operational performance impact on shareholder value was constructed. Method of pairwise correlations was used to prove relations between the factors.</p><p>The data for research were collected from sales and buying departments of the Russian divisions of the company.&nbsp; It has been built a panel data array, including major groups of goods (cash generators). Regression models were conducted during the empirical analysis. There were used different methods of regressions. The model with the best estimations was selected during the analysis. The results of evaluation were interpreted. In the end, a linear equation (reflected obtained dependencies of price premium and coupon events) was made.</p><p><strong>Results and recommendations</strong></p><p>Thus the direct effect of prices and promotional activities on increasing the operating performance of the company was proven. It has been found that prices have the greatest impact on sales. The optimal structure of discount policy was defined. Male audience found prices and all kinds of discounts more important than women one. The price index was the most crucial factor for the main and oldest brand. Characteristics of discount activities were more important for new brands.</p><p>Simulated data taking into account the fact of optimal structure of the price and discount policies were constructed. These information covered as retrospect as prospect data. Forecasted data with suggested optimizations showed much better performance. Finally, it was found that such optimizations were able to increase value of the company by 17.9 million dollars per year.</p><p>Thus the main research hypotheses were proven.</p>