Which of the following is true of the competitive-parity method of setting an advertising budget?
A)The budget is set based on a percentage of future sales.
B)The budget is set based on the total revenues that a company makes.
C)The budget is set based on the amount spent by competitors in the same industry.
D)The budget is set based on objectives set by the company and the cost required to accomplish it.
E)The budget is based on a percentage of current sales.

Question

Quizplus · Accepted Answer

The competitive-parity method involves setting the advertising budget to be in line with what competitors are spending in the same industry. It is not based on a percentage of future or current sales or total revenues, and it may not necessarily be tied directly to company objectives and costs.

Which of the Following Is True of the Competitive-Parity Method