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Advertising investment should not be included as the “returns” – brand contributions (ensued from advertisement) are expected to provide surplus (or incremental sales) towards covering direct/indirect costs.
Having said that, advertising investment is not a cost in the same manner as fixed or variable costs or any other attributable overheads, but measured as a long-term investment in your brand on which the brand must generate “returns”.
In todays’ heavily brand-driven business environment, advertising budget should be considered as part of a brand investment rather than considering it as expenditure.
In fact, such investment helps developing and strengthening your brand in short- and long-term, if it’s advertised (or invested) effectively.
As far as advertisement is concerned, expenditure ...
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Well, it’s a million dollar question particularly for those conservative-cum-old fashion business owners or managers. Some broiling questions like “How much we need to spend”, “Can we spend less than 3% based on total projected sales?