To set an advertising budget, Entree cologne first examines competitors' advertising to sales ratios published in trade magazines, and then allocates a percentage of sales dollars to the advertising effort. Which two budgeting methods are being employed?
A) Percentage of sales and objective and task
B) Competitive parity and payout planning
C) Competitive parity and percentage of sales
D) Payout planning and percentage of sales

Question

Quizplus · Accepted Answer

Entree cologne is using a combination of competitive parity and percentage of sales methods to set their advertising budget. They are examining competitors' advertising to sales ratios (competitive parity) and then allocating a percentage of their own sales dollars to advertising (percentage of sales).

To Set an Advertising Budget, Entree Cologne First Examines Competitors