Strategic Marketing Question:
In the marginal costing approach to promotional budgeting, the marketer only spends up to the point where any further spending would not generate enough extra business to justify the outlay. Which of the following statements reflects the advantages of this method?
Answer:
1. Company cannot become over-committed or run into trouble by relying on sales that do not, materialize.
2. Simple to calculate; also ensures that, if sales drop off, costs also drop.
3. Ensures that the firm remains on a par with the competitors, and does not waste expenditure.
4. Has a logical basis, and if carried out correctly will achieve the firm's strategic goals.
5. This method would maximize profits since no excess spending would result.
Answer: This method would maximize profits since no excess spending would result
2. Simple to calculate; also ensures that, if sales drop off, costs also drop.
3. Ensures that the firm remains on a par with the competitors, and does not waste expenditure.
4. Has a logical basis, and if carried out correctly will achieve the firm's strategic goals.
5. This method would maximize profits since no excess spending would result.
Answer: This method would maximize profits since no excess spending would result