How much of your budget should be allocated to the marketing

Reference no: EM13212206

a. You are a competing firm are the only sellers of a new product. You both realize that the one who captures most of the market share will be the one that spends the most on advertising and promotions. You have $1 million for advertising and promotion for all your products. You have to decide how much of your budget should be allocated to the marketing of the new product. Construct a payout matrix like the one shown in Notice that the price is the variable designated as being "high" or "low". What variable would you use in this example? The numbers in represent potential revenue. What might they represent in this example? Company A High Price Low Price 400 A 600 A High Price 400 B 100 B Company B 100 A 200 A Low Price 600 B 200 B

b. What challenges do you think there are in using this type of analysis in an actual business situation?

Reference no: EM13212206

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