Allocating funds to promotion by matching the competitor's absolute level of spending or the proportion per point of market share is referred to as _________.

Question

Quizplus · Accepted Answer

Competitive parity involves matching the competitor's level of spending on promotion, either in absolute terms or as a proportion per point of market share. This approach is based on the assumption that the competitor's spending reflects a reasonable allocation of resources to achieve its marketing objectives. Therefore, choosing competitive parity ensures that the company is not overspending or underspending on promotion compared to its competitors, which helps to maintain a relative competitive standing in the market.

Allocating Funds to Promotion by Matching the Competitor's Absolute Level