Question

Increasing the promotional budget for a product in order to increase awareness is not advisable in the short run under which of the following circumstances? Select: 1Save Answer Production capacity is maxed out (200% plant utilization) and the company is stocking out of the product Accessibility is less than 80% Demand in the segment is increasing One or more competitor has increased price

Answer 1

Answer:

Increasing the promotional budget for a product in order to increase awareness is not advisable in the short run under which of the following circumstances?

Production capacity is maxed out (200% plant utilization) and the company is stocking out of the product.

Explanation:

Since the production capacity has been exceeded and the company is still running out of stock of the product, there will be no need to increase the promotional budget for the product in order to increase awareness, especially in the short-run.  The implication of the scenario is that the demand for the product is far outstripping the supply and there is an apparent scarcity or shortage of the entity's product in the marketplace.  Until production the capacity has been expanded, the promotional budget for product awareness can be stopped and saved.