After reading the daily newspaper,the restaurant owner said,"The owner of Fellini's House of Noodles ran a quarter-page ad in today's paper.We'll just have to find enough money to run our own ad day after tomorrow." What budgeting technique is the restaurant owner most likely using?

Question

Quizplus · Accepted Answer

The restaurant owner is most likely using competitive parity budgeting, which involves matching the advertising budget of competitors in the same industry. The owner mentions the ad of a competitor and expresses the need to find enough money to run their own ad, indicating a focus on matching or keeping up with the competition rather than setting their budget based on their own financial constraints (sell you can afford budgeting) or comparing their budget with past performance or goals (comparative budgeting). The mention of a quarter-page ad does not provide enough information to suggest the use of relative scale budgeting, which involves allocating funds based on the relative importance or size of different business functions or departments.

After Reading the Daily Newspaper,the Restaurant Owner Said,"The Owner of Fellini's