While forecasting financials for a company, what typically happens to marketing expenses as a % of revenue as the company's product gets good feedback and customers return

I didnt understand the answer that why it is decreasing i mean the % of the marketing expenses#

1 Answer(s)


The key in the question is "product gets good feedback and customers return" - when this happens then the company has to spend less on marketing expense since word of mouth takes over. So marketing expense will decrease and revenue will increase and hence the ratio marketing expense/revenue will decrease

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