Assessing the Relationship Between Marketing Expenditure Efficiency and Corporate Financial Performance

Abstract

In today's highly competitive world of businesses, there is a need for efficient management of marketing investments in order to ensure good financial performance and sustained growth. Nevertheless, very little is known about the impact of properly allocated marketing expenses on corporate financial performance. This research seeks to evaluate the effect of marketing expenditure efficiency on corporate financial performance by developing a conceptual framework that treats marketing investment as a corporate resource used to create value. The uniqueness of this study is the combination of marketing expenditure efficiency with corporate financial performance analysis by determining the influence of efficient use of marketing resources on profitability and financial growth. The methodology applied will be quantitative in nature and will employ financial data gathered second-hand from the annual reports of PT Indosat Tbk and PT Telkom Indonesia Tbk for the period 2021–2026. The analysis of data was done through the use of Microsoft Excel, SPSS, and AMOS, where descriptive analysis, Shapiro-Wilk normality test, ANOVA, and Structural Equation Modeling (SEM) were done. It is evident from the results that there were significant variations in financial performance indicators during the research period, while SEM analysis shows a positive correlation between efficiency in marketing expenditure and corporate financial performance. The model proposed in this paper obtained good fit values for PT Indosat Tbk (χ² = 6.214, CFI = 0.984, RMSEA = 0.059), and PT Telkom Indonesia Tbk (χ² = 5.842, CFI = 0.982, RMSEA = 0.062).