A clothing store that sets their advertising budget by following the major competitor and adding an additional 15 percent is using the _____ method.
A) percentage-of-sales
B) arbitrary allocation
C) objective-and-task
D) competitive parity
E) affordability

Question

A clothing store that sets their advertising budget by following the major competitor and adding an additional 15 percent is using the _____ method.
A) percentage-of-sales 
B) arbitrary allocation 
C) objective-and-task 
D) competitive parity 
E) affordability

Quizplus · Accepted Answer

The given scenario describes the competitive parity method, which involves setting the advertising budget based on the competitor's spending level and adding an additional percentage to match or exceed their efforts. This method ensures that the company is not falling behind or overspending compared to its competitors.

A Clothing Store That Sets Their Advertising Budget by Following