To determine how much money to spend on advertising, marketers for a new brand of caffeinated energy drink decided that they wanted the advertising to create awareness of the new flavor in 80 percent of the energy drink market within one month of introduction. The marketers then determined how much it would cost to reach this goal. This is an example of which one of the following approaches to determining advertising budgets?
A)Objective-and-task
B)Percent of sales
C)Competition matching
D)Arbitrary allocation
E)Past-year comparison

Question

Quizplus · Accepted Answer

The fact that the marketers set a specific objective (creating awareness in 80% of the energy drink market within one month) and then calculated the cost of reaching that objective indicates that they were following the objective-and-task approach. This approach involves setting specific goals and then determining the budget required to achieve them, rather than basing the budget on past years' spending or industry averages.

To Determine How Much Money to Spend on Advertising, Marketers