Question

Rising promotion costs and shrinking profit margins are the result of ________?

1) new and improved technology
2) disintermediation
3) industry convergence
4) privatization
5) heightened competition

Answer 1

Heightened competition is the main cause of rising promotion costs and shrinking profit margins for businesses.

Step-by-step explanation:

The rising promotion costs and shrinking profit margins are the result of heightened competition. The forces of globalization and new technologies have increased the level of competition faced by many firms, as consumers can now order products from anywhere in the world. This increased competition puts pressure on businesses to spend more on promotion while maintaining lower profit margins.