Question

In the competitive-parity method of setting an advertising budget, the budget is set based on ________. Group of answer choices objectives set by the company and the cost required to accomplish them the amount spent by similar companies in the same industry a percentage of future sales a percentage of current sales the total revenues that a company makes

Answer 1

Answer:

In the competitive-parity method of setting an advertising budget, the budget is set based on competitors’ advertising activities and costs for setting advertising budget.

Explanation:

In competitive Parity Method,competition is one of the powerful factors affecting marketing strategy and performance.

This is evident during board meeting presentation by marketing and advertising strategists. The give the information gathered from research about other competitive firms budget because they know that competitive factor is given more importance in deciding advertising budget.

For instance, if their close competitors spend 4.5% of net sales on their advertising budget, the company will plan to spend, more or less.

That is the information that the budgeting committee enters on the budgeting plan for the period in view.

Here, there is a general belief that “competitors or leaders are always right.” thereby making decisions about budgeting competition driven.

This method considers the competitors’ advertising activities and costs for setting advertising budget. The advertising budget is fixed on the basis of advertising strategy adopted by the competitors.

Answer 2

Answer:

Explanation:

In the competitive parity method of setting an advertising budget, the organizations set the financial backing dependent on different organizations. They set their spending limit dependent on the sum spent by comparative organizations in a similar industry. This permits them to stay serious.