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The relationship between advertising and sales revenues has been the focus of numerous empirical and conceptual studies. Guided by past empirical works and using calculated values, the authors examine the implications of three advertising-to-sales response functions. The research findings are discussed in terms of advertising budgeting and future research on advertising effects. Noting four qualifications to their findings, the authors suggest that, within the bounds of the normative models and specific parameters examined, overadvertising could cost very little in foregone profit and may result in appreciable sales gains.

The authors present a review, synthesis and evaluation of the published works on marketing and economic development o ver the last 30 years. Future research directions are also provided.

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