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 his same customer base 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, as he was basing his budget on what his competitors were spending on promotion.

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