1. Law Of Diminishing Returns
Sales and Promotion Budgets

2. Law Of Diminishing Returns
In economics, law stating that if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point.
For example:
if more and more laborers are added to harvest a wheat field
at some point each additional laborer will add relatively less output than his predecessor did
simply because he has less and less of the fixed amount of land to work with.
The principle later accepted as an economic law underlying all productive enterprise.
The Columbia Encyclopedia, Sixth Edition.    

3. Promotion Budgets
Increases in Promotion Budget have Diminishing Returns:
The first $1,500,000 buys 36% awareness;
Spending another $1,500,000 (for a total of $3,000,000) buys approximately 50%.
The second $1,500,000 buys only 14% more awareness.
Foundations Student Guide 2010 page 18
14%
36%

4. Promotion Budgets First $500 yields 8% Next $500 yields 13%

5. Promotion Budgets Awareness
Each year 1/3 of those who knew about a product forget about it
When 100% Awareness is achieved, spending $1,400,000/year will maintain that level
Applied by product
33%

6. Sales Budgets Accessibility
Companies must have at least 2 products in a segment to achieve 100% accessibility
Diminishing returns:
Product at $3,000,000
Segment at $4,500,000
When 100% Accessibility is achieved, spending $3,300,000/year across the multiple products in the segment will maintain that level
Applied by Segment