By W. Duncan. Reekie

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It is a single-period model. 7. Advertising varies in quality, effectiveness and appeal, often in a manner unrelated to the level of advertising expenditure. One other model which has been suggested takes several of these points into consideration. This is Verdoorn's model for determining the firm's optimal input mix. {2) It wholly overcomes objections 1, 2 and 3, and, at least partially, objection 6. The basic model is shown in Fig. 2. Cost and gross revenue are plotted on the y-axis, quantity sold, on the x-axis.

Cinemas also have the advantage of being used by one opulent, but often neglected market segment, the new entrants, the teen and early-twenty age groupings who have yet to set up home and so become TV viewers rather than cinemagoers in their turn. 2 per cent of total expenditure, the radio (mainly Radio Luxembourg) is an insignificant medium in Britain. However, this situation will probably change dramatically with the spread of commercial radio over the next few years. The typical audience of Radio Luxembourg, homogeneous national youth, will not be replicated.

What effect will that have on sales response? Furthermore, this year's advertising will have some sort of carry-over effect into next's. So the manager attempting to construct a predictive sales-response function must not only take into account the facts that advertising may differ qualitatively, and that rivals and consumers may react differently, he must also include in his calculations the fact that the 'goodwill input' at the commencement of each period will differ and will, in turn, alter the shape of the response function from one period to the next.

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