What makes sales in Chinese shampoo industry? A DEA study based on efficient market hypothesis

Abstract

Purpose

The paper aims to find the functional relationship among 14 shampoo brands' price, quality, marketing expense and sales in the Chinese shampoo industry. Also studied is which one, among these factors, is the more important.

Design/methodology/approach

By using data envelopment analysis models, the authors propose to maximize the sale allocating efficiency scores to satisfy the hypothesis that the shampoo market is efficient, and then, the sales functions, linear and exponential, can be determined and specified.

Findings

It is found that an exponential sales function is more suitable to characterize the Chinese shampoo industry, and the price factor is a major influence on creating sales.

Originality/value

The paper proposes a method, from an original perspective, to analyze the sales function among the influence factors and to determine which one is more important. The method can be applied to other markets if the assumed conditions could be satisfied.

Citation

Yang, C., Yang, F., Xia, Q. and Ang, S. (2012), "What makes sales in Chinese shampoo industry? A DEA study based on efficient market hypothesis", Asia Pacific Journal of Marketing and Logistics, Vol. 24 No. 4, pp. 678-689. https://doi.org/10.1108/13555851211259089