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Increasing the promotional budget for a product in order to increase awareness is not advisable in...

Increasing the promotional budget for a product in order to increase awareness is not advisable in the short run under which of the following circumstances?
Select: 1
Accessibility is less than 80%
Production capacity is maxed out (200% plant utilization) and the company is stocking out of the product
Demand in the segment is increasing
One or more competitor has increased price
business   Operations-Management   
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Answer #1

The correct answer is option B, i.e. Production capacity is maxed out (200% plant utilization) and the company is stocking out of the product. Promotional budget refers to the amount of money that is utilized to promote the products and services of a company. When the production is not able to keep pace with the demand of the product, it is advisable to not provide additional promotional offers as that might further increase demand.

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