Adam Is the Marketing Manager for the Dirt Bikes Division

Multiple Choice

Adam is the marketing manager for the dirt bikes division of Honda. Adam estimated that his divisional marketing budget for the year will be $2,000,000. He presents his budget to John, the divisional CFO. John reviews and tells Adam he needs to use zero-based budgeting. Considering John's direction, what is the most appropriate analysis for Adam? Consider each answer independently.

A) Adam breaks down each expense, between commercials, trade shows, and online-advertising. The total of all of these ends up being $2,000,000 which should generate $2,000,000 in revenue.
B) Adam benchmarks his budget against his biggest competitor, Kawasaki. Kawasaki sells more dirt bikes than Honda and spends around $1,800,000 a year on the division's marketing efforts. To outsell Kawasaki, Adam believes Honda will need a greater marketing investment.
C) Adam knows that for every $10,000 dirt bike sold, Honda makes around $2,000. Adam performs an analysis and concludes that spending $2,000,000 on commercials and event advertisements should sell a little over 2,000 dirt bikes
D) Adam reviewed dirt bike sales for the last 5 years and noted that marketing was around 10% of sales. Management expects to sell $20,000,000 worth of dirt bikes this year. The $2,000,000 maintains a consistent marketing expense to sales ratio.