Wan Sulaiman Bin Wan Yusoff2024-05-302024-05-302023Wan yusoff, P. D. H. W. S. (2023). Profit and Advertising Relationship Based on Product Differentiation. I-IECONS E-Proceedings, 10(1), 65–76. https://doi.org/10.33102/iiecons.v10i1.742805-474110.33102/iiecons.v10i1.74https://epiiecons.usim.edu.my/index.php/eproceeding/article/view/74https://oarep.usim.edu.my/handle/123456789/1719710th INTERNATIONAL ISLAMIC ECONOMIC SYSTEM CONFERENCE 2023 (I-iECONS 2023) : “Sustainable Development through Innovative Economic Transformation” /Editors : Amalina Mursidi, Agoos Munalis Tahir, Suhaida Herni Suffarruddin, Norfhadzilawati Rahim, Murad Ali Ahmad Al-Zaqeba, Muhammad Iqmal Hisham Kamaruddin Conference Dates: August 14 2023 | Conference Location: Millennium Makkah Al Naseem Hotel Mecca Saudi Arabia Organized by Faculty of Economics and MuamalatThis paper investigates the positive relationship between profit and advertising based on product differentiation on imperfect oligopoly market. Differentiated product under these markets put pressure on manufacturers to produce high quality products. Advertising helps them to take advantages of economies of scale, absolute cost advantage and capital requirement on new entrance. The study is using firms’ data of certain specific manufacturers of heterogeneous products, through multiple regression, to prove that the positive relationship between profit rate and advertising is significant and still hold. By using the same data, the study could be able to relate the advantage of advertising for incumbent firms with barrier to entry for the new firms. In addition, the paper also highlights the view of ethical values of advertising based on Islamic perspective. The discussion focused on informative and educative advertising which is allowed in Islam and persuasive approach as well as manipulative advertising which is prohibited and immoral according to Islam.en-USProfit, Advertising, Product Differentiation, Informative & Educative (Halal), Persuasive and Manipulative (Haram)Article6576