Question

Doodle Corporation, a manufacturer of safety pins, decided that the company had to increase the awareness of its glow-in-the-dark pins among children and mothers. It also wished to increase the sales of its basic steel pins by 10% in the current financial year. It was convinced that, in order to attain these goals, it had to spend $1.5 million, so it allocated this amount for promotional expenditure. Which of the following promotional budgeting methods was used by Doodle Corporation?

Answer 1

Answer:

Objective and task budgeting method

Explanation:

The objective and task method refers to a budgeting method where a business allocates a certain marketing budget in order to achieve specific objectives, instead of simply allocating a marketing budget based on percentage of sales revenues.

Doodle set its specific goals:

• increase the sales of its basic steel pins by 10%
• increase the awareness of its glow-in-the-dark pins

And then it allocated $1.5 million for marketing expenses.