Though the method of setting an advertising budget is simple to use and helps management think about the relationships among promotion spending,selling price,and profit per unit,it wrongly views sales as the cause of promotion rather than the result.

Question

Quizplus · Accepted Answer

The percentage-of-sales method sets the advertising budget as a fixed percentage of past or anticipated sales, which implies that sales drive promotion rather than promotion driving sales.

Though the Method of Setting an Advertising Budget Is Simple