Running head: HYPOTHESIS IDENTIFICATION ARTICLE ANALYSIS

Survey Paper John D. Kim RES 342 Feb 6,2012

Mark Alsakka

HYPOTHESIS IDENTIFICATION ARTICLE ANALYSIS Article Analysis It is tremendously important to be able to recognize and understand the hypothesis of a research study. The analysis isolates and reviews the hypothesis in the article, Research on Advertising in a Recession. The implications of the hypothesis, and whether it was accepted or rejected will also be stated. Research on Advertising in a Recession researches information on the effectiveness of

advertising during a recession, and when necessary cutbacks are made, the first thing to be cut is advertising. The single most persuasive basis for cutting back advertising for the period of a recession is that sales throughout a recession are expected to be worse than they would be for the period of a growth (Tellis & Tellis, 2009). The economy obviously affects the amount and how advertisements are created. This is clear when looking at other economies around the world. In countries where customs show a propensity toward immediate orientation and evasion of ambiguity and whose executives are under stress from their shareholders, the patterns are stronger (Tellis & Tellis, 2009). This article examined a few experimental studies on sales and market shares and how it affects advertising. Most of the research confirmed the accepted practice in advertising during a recession incorporated outcomes, which went on for years following a recession. The analyzed experimental studies displayed consistent data that sales stayed sluggish before and after a recession because advertising was cut. Due to the fact that sales are low, profits and capitalization are also lost. This data shows that if a company does not cut advertising costs during a recession, then sales, profits and capitalization may increase. It was shown that companies which had increased their advertising in a recession, often came across larger earnings, more market share, and higher sales (Tellis & Tellis, 2009).

HYPOTHESIS IDENTIFICATION ARTICLE ANALYSIS The studies performed were used to analyze and find the effect of advertising and

profitability during a recession. All three studies showed during a recession, advertisements is a key factor to a companies sales and profits. Two studies show, when a company cuts back on advertising costs during a recession, profits decreases. One study showed, by keeping advertising costs where they are during a recession, it helped produce growth in sales and net income. (Tellis & Tellis, 2009) The reason for cutting costs for advertising is due to the fact that during a recession, sales drop. However, this reasoning contradicts what was found in the study. Although most companies tend to cut back on advertising costs, the study argues for an increase in advertising during a recession to improve sales. By increasing advertising, the effectiveness of it is increased due to the fact that more companies are decreasing their advertising efforts. The firm that increases advertising during a recession, can and will most likely have more sales and a better market share (Tellis & Tellis, 2009). Reading the study and analysis of the above mentioned article, the hypothesis can be rejected and it can be said that companies should not cut back advertising, as a matter of fact, they should increase their advertising budget because this could result in more gains.

HYPOTHESIS IDENTIFICATION ARTICLE ANALYSIS References Tellis, G.J., & Tellis, K. (2009, September). Research on Advertising in a Recession. Journal of Advertising Research, 49(3).