I been trying to get a handle on the proposed marketing budgets for next year and need some more information to better evaluate our plans. I$\text{'}$m especially interested in the Traditional segment and how our Acre product stacks up to the competition. Our data show awareness for Acre is $83\mathrm{.}9\%.$

Based on our analysis of this segment, estimates show diminishing returns on promotion spending. More specifically, the first one million dollars we spend typically generates a $24\%$ increase in awareness, the second million adds $15\%$ more, and the third million a $5\%$ increase. We also know that one$-$third of Acre's existing level of awareness is lost each year.

Due to changes in our strategic focus, we plan to shift attention and budget resources for product promotion. This means that next year the promotion budget for Acre will be reduced to one million dollars. Can you estimate the awareness level we can expect for Acre given this anticipated change in spending?

Linda Lopez

Board Member, Marketing $|$ Andrews Corporation

$104\mathrm{.}0\%$

$83\mathrm{.}9\%$

$52\mathrm{.}0\%$

$79\mathrm{.}9\%$