Advertising and promotion budgeting during volatile economic conditions: factors influencing the level of decentralisation in budgeting and its relations to budget size and allocation

Yunjae Cheong

Hankuk University of Foreign Studies

Kihan Kim

Seoul National University

Hyuksoo Kim

St. Bonaventure University

Introduction

The world currently faces its worst economic crisis since the Great Depression of the 1930s (Macleod 2009). During a recession, retail sales are slow, and advertising budgets are often trimmed back, as firms face severe pressure to cut back marketing investments (Willis & Willis 1993; Srinivasan et al. 2005). Several observers (Barwise 1999; Brenner 2009), however, suggest that firms that either maintain or increase their marketing spending during difficult economic times see significant benefits.