Define advertising and explain why new brands with small market share tend to spend proportionately more for advertising and sales promotion than those with a large market share.
What will be an ideal response?
Advertising is impersonal, one-way mass communications about a product or organization that is paid for by a marketer. There are two reasons why new brands with smaller market share tend to spend proportionately more on advertising that those with a larger market share: (1) beyond a certain level of spending for advertising and sales promotion, diminishing returns set in. That is, sales or market share begins to decrease no matter how much is spent on advertising and sales promotion, a phenomenon called the advertising response function and (2) a certain minimum level of exposure is needed to measurably affect purchase habits.
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Which of the following is not a limitation of the internal control system?
a. errors are made due to employee fatigue b. fraud occurs because of collusion between two employees c. the industry is inherently risky d. management instructs the bookkeeper to make fraudulent journal entries
At 12/31/2009, the cash and securities held in a sinking fund to redeem bonds in 2011 are classified on the balance sheet as current assets
Indicate whether the statement is true or false
Which assertion for ending inventory is most likely violated if the gross profit percentage is much greater than last year?
A. Existence. B. Completeness. C. Rights and obligations. D. Valuation and allocation.
Which of the following items will not create a deferred tax liability?
A. Tax basis of an asset is less than its book basis. B. Expenses or losses are deductible earlier for tax purposes than for book purposes. C. Revenues or gains are recognized earlier for book purposes than for tax purposes. D. Operating loss or tax credit carryforwards exist.