Toward the end of the fiscal year,the owner of a small company came back from lunch concerned because he had learned that a business targeted to the same customers as his was planning on spending $150,000 on promotion.As soon as he arrived at the office,he called his financial manager and said,"I want to budget $150,000 for next year's promotion." Which method of promotional budgeting did the owner want to use?
A)the objective-task method
B)the percentage-of-sales method
C)the competitive-parity method
D)the bottom-up method
E)the pull-push method

Question

Quizplus · Accepted Answer

The owner wanted to use the competitive-parity method, which involves matching or exceeding the promotional efforts of competitors. He learned that a business targeting the same customers was planning on spending $150,000 on promotion, so he decided to budget the same amount to stay competitive. This method is common in industries where competition is high, and it helps businesses ensure they are not disadvantaged in the marketplace.

Toward the End of the Fiscal Year,the Owner of a Small