Setting an advertising budget based on the percentage-of-sales approach sounds simple, but it is full of problems.

Question

Quizplus · Accepted Answer

The percentage-of-sales approach assumes that there is a direct relationship between sales and advertising spending, which is not always the case. It also does not take into account external factors that may impact sales, such as competition or economic conditions, and may result in underinvestment or overinvestment in advertising.

Setting an Advertising Budget Based on the Percentage-Of-Sales Approach Sounds