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 Alan product stacks up to the competition. Our data show awareness for Alan is

$81\mathrm{.}6\%.$

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 Alan'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 Alan will be reduced to

one million dollars. Can you estimate the awareness level we can expect for Alan given this

anticipated change in spending?

Linda Lopez

Board Member, Marketing $|$ Andrews

Corporation

$51\mathrm{.}2\%$

$101\mathrm{.}2\%$

$81\mathrm{.}6\%$

$78\mathrm{.}4\%$