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How does advertisement reduce selling cost?

Asked by: SALMAN 659 days ago - 1 Answers - 1136 views

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If your advertisement campaigns are effective, e.g., increase level of interest among consumers, increase the perceived value of your product and/or service, etc.; then it would be much easier for your sales team to sell the product and/or service. This means they could probably sell more quantity, sell faster, and at higher prices.

For example, if a company earns $100 million in sales revenue with $10 million sales cost, then the selling cost is 10%. If the company launched an advertising campaign that costs $1 million and it increased the sales to $150 million, then the selling cost is $11 million or 7.3%. In this case, advertisement effectively reduced selling cost.

Answer by pinyo 658 days ago

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