The Impact of Advertisment Expenditures on Demand and Profit in Iran’s Textile and Clothing Industry

Nowadays, advertising is one of the most  important tools for increasing demand and profit in planning of products and condification of marketing strategies. The main purpose of this study is investigating and prices on demands and profits of Iran's textile and garment industry using a panel model. therfor, annual data from 1995 to 2007 for the 12 four-digit code, is used in the sub-sectors of textile and garment industry.The results of estimation of Dorfman-Steiner model indicate a positive and meaninigful impact of advertising expenditures, prior period revenue and demand and negative impact of price index on the demand for textile and garment industry.The price of elasticity of demand and income indicates that the industry  is very necessary in consumption basket of Iranian's household. The results of estimation of Chamberlain profit model suggest a positive relationship between benefit and advertising expenditures.Thus, the increasing of advertising expenditure, causes the profitability progress with modest rate. This result is important due to planning and condifiying marketing strategies for active firms.