In the Late 90's,Sears Spent Much of Its Communication Budget

question 60

Multiple Choice

In the late 90's,Sears spent much of its communication budget advertising the "Softer Side of Sears" campaign since it felt the customer knew very little of Sears' apparel assortments and thus there would be a substantial return from advertising apparel versus advertising the more known appliances.What principle for budget allocation was Sears potentially using?

• A)percentage of sales method
• B)rule of thumb method
• C)asset principle
• D)high-assay principle
• E)affordable method

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Definitions:

Economic Profits

Profits earned by a firm after accounting for both explicit and implicit costs, indicating the total returns exceeding the costs of all resources employed.

Economic Profit

The difference between a firm's total revenue and its total costs, including both the explicit and implicit costs, representing the financial gain exceeding the opportunity costs.

Total Revenue

The gross income of a company, which is the sum of money generated from its goods or services sold before deducting any costs.

Annual Salary

The total amount of money earned by an employee in a year from their job before taxes and other deductions.