The percentage of sales method for communication budgeting tends to allocate funds for advertising in the opposite direction from what are needed.

Question

Quizplus · Accepted Answer

The percentage of sales method allocates funds based on a percentage of sales, which means that advertising budget increases when sales increase and decreases when sales decrease. This may not always reflect the actual advertising needs of the business, as a business may need to increase advertising to drive sales rather than waiting for sales to increase before increasing advertising budget. Therefore, the percentage of sales method can allocate funds in the opposite direction of what is needed.

The Percentage of Sales Method for Communication Budgeting Tends to Allocate