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market-based management
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10.3 Estimating the Advertising Carryover Effect (Figure 10-22)
Using the data provided, how does the carryover effect change when the incremental sales revenue after advertising is $10,000 rather than $5,000?
How does the new carryover effect (estimated in the previous question) affect the overall incremental sales of the marketing communications effort?
Analysis
Scale
Thousands
Advertising Period
Before Ad
During Ad
After Ad
Advertising Expense
$10
$
$15
$
$10
$
Sales Performance
Without Ad Spending Increase
$195
$
$200
$
$205
$
With Ad Spending Increase
$220
$
$210
$
Incremental Sales
20
5
Estimated Carryover Effect
0.25
Total Incremental Sales
26667
Carryover Sales (after period 1)
6667
Starting Data
Scale
Thousands
Advertising Period
Before Ad
During Ad
After Ad
Advertising Expense
$10
$
$15
$
$10
$
Sales Performance
Without Ad Spending Increase
$195
$
$200
$
$205
$
With Ad Spending Increase
$220
$
$210
$
Incremental Sales
20
5
Estimated Carryover Effect
0.25
Total Incremental Sales
26667
Carryover Sales (after period 1)
6667
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