To set an advertising budget, a marketer of filing cabinets examines advertising-to-sales ratios published in trade magazines and then allocates a percentage of sales dollars to the advertising effort. Which two budgeting methods are being employed?
A)Competitive parity and percentage-of-sales methods
B)Competitive parity and payout planning methods
C)Payout planning and percentage-of-sales methods
D)Percentage-of-sales and objective and task methods
E)Payout planning and arbitrary allocation methods

Question

Quizplus · Accepted Answer

The marketer is using the percentage-of-sales method by allocating a percentage of sales dollars to advertising. By examining advertising-to-sales ratios in trade magazines, they are also considering competitive parity, which involves matching competitors' spending.

To Set an Advertising Budget, a Marketer of Filing Cabinets