Which of the Following Statements Is True of the Factors

question 104

Multiple Choice

Which of the following statements is true of the factors that affect an advertising budget?

• A) High-market-share brands usually require proportionately high advertising expenditure as a percentage of sales to maintain share.
• B) Brands in less-differentiated or commodity-like product classes require less advertising to establish a unique image.
• C) New products typically merit large advertising budgets to build awareness and to gain consumer trial.
• D) In a market with few competitors and moderate advertising spending, a brand must advertise more heavily to be heard.
• E) Established brands usually are supported with high advertising budgets, measured as a ratio to sales.

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Definitions:

Market Valuation

The process of determining the current value of a company or an asset in the marketplace.

Constraints

Conditions or limitations within which a system, process, or project must operate.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and disposal, used in valuing inventory and accounts receivable.