If Pete raises his price of muffins from $2 to $3 and his sales revenue increases from $35,000 to $38,000, then:a. this is impos
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Answer:
C. I would only need to create 33% new awareness to maintain 100% this year.
Explanation:
Each product’s promotion budget determines its level of awareness. A product’s awareness percentage reflects the number of customers who know about the product. An awareness of 50% indicates half of the potential customers know it exists. From one year to the next, a third (33%) of those who knew about a product forget about it.
Last Year’s Awareness - (33% * Last Year’s Awareness) = Starting Awareness
If a product ended last year with an awareness of 50%, this year it will start with an awareness of approximately 33%. This year’s promotion budget would build from a starting awareness of approximately 33%.
Starting Awareness + Additional Awareness = New Awareness
You lose about 1/3rd each year as customers forget the product.
