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| Topic: |
Business
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| Number of pages / Number of words: |
5 / 1156 |
Essay's paper body
Kingsford is starting to feel the effects of the low amount of advertising over the years. MMA suggested investing $7 million. In 1998, TV advertising spend drove an incremental 7% increase. If Kingsford spent $7 million, they could expect at least a 7% increase leading to 5.25 million incremental sales...
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At a 50% contribution margin, this is $12.25 mil. Take out the advertising cost of $7 mil which leaves the company with $5.25 million incremental sales from investing in advertising. (This is assuming a 50% contribution margin similar to Clorox).
Advertising should focus on how Kingsford is a quality product and instill value to the customer...
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