A marketing firm decides to purchase some media time in an attempt to sell its new product. After purchasing approximately $1 million worth of time, it notices no impact on the sales of the product. However, when it increases the media time to the value of $3 million, a substantial increase in sales is observed. This change is best explained by:
A)the concave-downward function.
B)the objective and task method.
C)the competitive parity method.
D)the S-shaped response function.
E)the DAGMAR model.

Question

Quizplus · Accepted Answer

The S-shaped response function suggests that the relationship between media expenditures and sales is not linear, but rather there is a point at which further increases in media spending will result in a significant increase in sales. The scenario in the question demonstrates this phenomenon, as there was no impact on sales until media spending reached $3 million.

A Marketing Firm Decides to Purchase Some Media Time in an Attempt