Trade Promotion Expenses as Percent of Sales Is Higher Relative

question 77

Multiple Choice

Trade promotion expenses as percent of sales is higher relative to competitors in the case of:

• A)prospector strategy.
• B)differentiated defender strategy.
• C)low cost defender strategy.
• D)differentiated reactor strategy.

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Definitions:

Average Rate of Return

A financial ratio that shows the average annual return on an investment, expressed as a percentage of the initial investment cost.

Estimated Annual Net Income

The projection of net earnings over a given fiscal year, taking into account all expected revenue and expenses.

Cash Payback Period

The length of time it takes for an investment to generate enough cash flow to recoup the original investment.

Annual Net Cash Flows

The net amount of cash that is received or expended by a business during a year, after all cash inflows and outflows are accounted for.