Why do companies with new brands that have a small market share tend to spend proportionately more for advertising and sales promotions compared to those with a large market share for existing products?

Question

Quizplus · Accepted Answer

Companies with new brands that have a small market share need to spend proportionately more on advertising and sales promotions to achieve a certain minimum level of exposure to measurably affect purchase habits. This is because customers are less likely to be aware of the new product, and thus, more advertising is needed to create awareness and trial. Additionally, sales promotions can help incentivize trial and encourage customers to switch from established brands to the new brand. Once the brand gains a larger market share, less advertising and sales promotion may be needed to maintain market share and prevent product cannibalization.

Why Do Companies with New Brands That Have a Small