Which of the following statements is most likely true regarding the competitive-parity method?
A) This method involves starting with total revenues, deducting operating expenses and capital outlays, and then devoting some portion of the remaining funds to advertising.
B) It is based on the availability of funds rather than on opportunities.
C) It wrongly views sales as the cause of promotion rather than as the result.
D) In this method, promotion budgets are set to match competitors' outlays.
E) This method involves setting the promotion budget at a certain percentage of current or forecasted sales.

Question

Quizplus · Accepted Answer

The competitive-parity method involves setting promotion budgets to match the competitors' outlays. This method assumes that competitors are spending the appropriate amount on promotion and matches that expenditure. This method does not consider the company's goals or its unique marketing plan, which makes it less effective than other methods.

Which of the Following Statements Is Most Likely True Regarding