I been trying to get a handle on the proposed marketing budgets for next year and...
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I been trying to get a handle on the proposed marketing budgets for next year and need some more information to better evaluate our plans. I'm especially interested in the Low Tech segment and how our Abby product stacks up to the competition. Our data show awareness for Abby is 82.9%. Based on our analysis of this segment, estimates show diminishing returns on promotion spending. More specifically, the first one million dollars we spend typically generates a 24% increase in awareness, the second million adds 15% more, and the third million a 5% increase. We also know that one-third of Abby's existing level of awareness is lost each year. Due to changes in our strategic focus, we plan to shift attention and budget resources for product promotion. This means that next year the promotion budget for Abby will be reduced to one million dollars. Can you estimate the awareness level we can expect for Abby given this anticipated change in spending? I been trying to get a handle on the proposed marketing budgets for next year and need some more information to better evaluate our plans. I'm especially interested in the Low Tech segment and how our Abby product stacks up to the competition. Our data show awareness for Abby is 82.9%. Based on our analysis of this segment, estimates show diminishing returns on promotion spending. More specifically, the first one million dollars we spend typically generates a 24% increase in awareness, the second million adds 15% more, and the third million a 5% increase. We also know that one-third of Abby's existing level of awareness is lost each year. Due to changes in our strategic focus, we plan to shift attention and budget resources for product promotion. This means that next year the promotion budget for Abby will be reduced to one million dollars. Can you estimate the awareness level we can expect for Abby given this anticipated change in spending?
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Managerial Accounting Decision Making and Performance Management
ISBN: 978-0273764489
4th edition
Authors: Ray Proctor
Posted Date:
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