In using the payout planning method of developing a marketing communications budget, the marketing budget would be reduced:
A) at the product's introduction, then increased when brand acceptance occurs.
B) when the brand becomes the market leader.
C) when the brand reaches the point at which additional dollars invested in communications yields diminishing returns.
D) when the market becomes saturated.

Question

Quizplus · Accepted Answer

The payout planning method involves setting a budget based on the expected sales revenue from the product. As sales increase, the budget is increased proportionally. However, there comes a point where additional spending on marketing communications will yield diminishing returns. At this point, the budget should be reduced to only what is necessary to maintain brand awareness and customer loyalty. Therefore, option C is the correct choice.

In Using the Payout Planning Method of Developing a Marketing