Marginal analysis method of communication budget setting is based on:
A) Determining the specific tasks for accomplishing the communication objectives
B) The marketing principles of the product life cycle-and where your product/category is currently operating
C) Setting the communication budget as a fixed percentage of forecast sales
D) The economic principle that firms should increase communication expenditures so long as each additional dollar spent generates more than a dollar of additional contribution
E) None of these

Question

Quizplus · Accepted Answer

The marginal analysis method of communication budget setting is based on the economic principle that firms should increase communication expenditures so long as each additional dollar spent generates more than a dollar of additional contribution. This means that the firm should allocate its budget by analyzing the additional contribution that will be generated by each additional dollar spent on communication. Therefore, the correct option is D. Option A is not specific to the method of communication budget setting, option B is more relevant to product marketing strategy, and option C is not an effective method of communication budget setting as it does not take into account the effectiveness of communication expenditure. Option E is not the correct answer as one of the options must be correct.

Marginal Analysis Method of Communication Budget Setting Is Based On