Question

Assume Bob of "Gut-Bomb Burgers" Corp. would like to increase his company's market share by one share point to a total of nine percent. The burger industry's total marketing effort is $50 million. Bob is currently spending $4 million on marketing. How much additional money would Bob have to invest in marketing to increase his company's market share by one share point?

Answer 1

$750,000

Step-by-step explanation:

Calculation for the additional money that Bob have to invest in marketing to increase his company's market share by one share point

Based on the information given we were told that the burger industry's total marketing effort was the amount of $50 million, this means that the share of point will be calculated as :

Share of point=Total marketing effort of $50,000,000/100

Share of point=$500,000

Second step is for us to make use of the 1.5 rule from the parity budget by multiplying it with the amount of $500,000

Hence,

Additional money=$500,000*1.5

Additional money=$750,000

Therefore the additional money that Bob have to invest in marketing to increase his company's market share by one share point will be $750,000