New brands with a small market share tend to spend proportionately more for advertising than those with a large market share because of the reasons for higher advertising cost for smaller business is:
First, after a certain level of spending, diminishing returns make a place in the returns..
-Secondly sales or market share will decrease without mattering how much is spent on advertising and sales promotion. This is known as the advertising response function.
-Thirdly, new brands always tend to require higher spending to maintain a fixed minimum level of exposure to affect the purchase habits of the customers measurably.
New brands always require higher spending to reach that minimum level of exposure needed to affect purchase habits of the consumers.
To know more about advertising response function here:
https://brainly.com/question/16016934
#SPJ4
