Eureka! Institutional Repository

This study provides an analysis of the communication budget allocation in the Greek food industry. The purpose of this article focuses first on improving our understanding of whether the paradigm shift in budget allocation from advertising to sales promotion exists or not in case of Greek food industry, and second how communication expenses affect firms’ performance in regards to sales volume and profitability. The results show that the advertising expenses is a very small part of total communication expenses and the trend for the advertising expenses has shown a remarkable decrease while the trend for the sales promotion budgets has shown an increase that time. For the second hypothesis the results show that total communication budget would have a twofold effect on financial performance: communication intensity, as expected, is positively related to sales growth and negatively related to profitability.