The payout-planning method of developing a marketing communications budget establishes a ratio of advertising to sales or market share, and then reduces the ratio as the product reaches the threshold level and diminishing returns begin to occur.

Question

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The statement accurately describes the payout-planning method of developing a marketing communications budget. The method aims to allocate a budget that will provide a certain return on investment (ROI) by setting a ratio of advertising spend to sales or market share. As sales or market share increase, the ratio is reduced to account for diminishing returns on additional advertising spend.

The Payout-Planning Method of Developing a Marketing Communications Budget Establishes