1. Research results were presented showing that sales volume is about 14.6 times more responsive, on average, to changes in price than to changes in advertising. Explain exactly what this means for the brand manager of a brand who is considering whether to grow sales by increasing advertising expenditures or lowering the price. 2. Data in this same section indicated that nondurable goods (versus durables) are relatively more responsive to price cuts than advertising increases. Offer an explanation for this differential. 10. Show your understanding of and the data presented in by constructing a spreadsheet (using, for example, Microsoft Excel) and altering the elasticity coefficients for different airlines. For example, just as Delta’s elasticity coefficient was changed from 0.1 to 0.2 while holding all the others constant at 0.1, you may want to vary the coefficient for, say, Southwest Airlines, which for this particular year was by far the major investor in advertising.
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