Towards the end of the fiscal year,the owner of a small company learned that a business targeting the same customers as his was planning on spending $150,000 on promotion.As soon as he arrived at the office,he called his financial manager and said,'I want to budget $150,000 for next year's promotion.' Which method of promotional budgeting was the owner considering?

Question

Quizplus · Accepted Answer

The owner is considering setting the promotional budget based on what their competitors are spending, which is the competitive-parity method. This method ensures that the company's promotional activities are in line with industry norms and helps avoid overspending or underspending. The other methods listed (percentage-of-sales, bottom-up, resource-allocation, and objective-task) do not involve looking at competitors' spending as a factor in determining the promotional budget.

Towards the End of the Fiscal Year,the Owner of a Small