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 targeting 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 setting the promotional budget based on what competitors are spending. He heard that a similar business was planning to spend $150,000, so he decided to match that amount. This method can help ensure that a business remains competitive in the marketplace.

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