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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 Performance segment and how our Awe product stacks up to the competition. Our data show awareness for Awe is 77.3%. 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 Awe'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 Awe will be reduced to one million dollars. Can you estimate the awareness level we can expect for Awe given this anticipated change in spending? Linda Lopez Board Member, Marketing | Andrews Corporation

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 Performance segment and how our Awe product stacks up to the competition. Our data show awareness for Awe is 77.3%. 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 Awe'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 Awe will be reduced to one million dollars. Can you estimate the awareness level we can expect for Awe given this anticipated change in spending? Linda Lopez Board Member, Marketing | Andrews Corporation

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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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 Performance segment and how our Awe product stacks up to the competition. Our data show awareness for Awe is 77.3%. 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 Awe'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 Awe will be reduced to one million dollars. Can you estimate the awareness level we can expect for Awe given this anticipated change in spending? Linda Lopez Board Member, Marketing | Andrews Corporation 75.5% 77.3% 49.8% 95.9% Respond
Transcribed Image Text: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 Performance segment and how our Awe product stacks up to the competition. Our data show awareness for Awe is 77.3%. 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 Awe'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 Awe will be reduced to one million dollars. Can you estimate the awareness level we can expect for Awe given this anticipated change in spending? Linda Lopez Board Member, Marketing | Andrews Corporation 75.5% 77.3% 49.8% 95.9% Respond
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