Impact of Marketing Activities in the Early Years of a Firm’s Life on Its Future Performance

Abstract

The aim of this paper was to analyze in which year, after launching a new venture, marketing activities (dialogue with customers and engaging in promotional efforts) impact its future performance. To do so, logistic regression models were created in which the dependent variables considered as performance were survival and firm profitability. The independent variables considered were dialogue with customers and engaging in promotional efforts. The sample consisted of data collected in a longitudinal survey of 1,214 American nascent entrepreneurs, who formed the Panel Study of Entrepreneurial Dynamics II (PSED II). The beginning of marketing activities in the firm’s first and second years was related to its performance in the second, third and fourth years. The results of this research show that the first year of operation is the optimal time for the entrepreneur to initiate dialogue with customers. They also show that engaging in promotional efforts in the firm’s first year of operation leads to strong performance in subsequent years.