There are three methods of determining advertising budgets - % of sales, competitive-parity and objective/ task method. How do they vary in approach?
% of sales views sales as the cause of promotion rather than the effect of promotion, you get a certain % of sales for your budget.
Competitive-parity- setting the promotion budget to match competitors based on their analysis of competitors' advertisements.
Objective/task method- developing the promotion budget by (1) defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives, (3) estimating the costs of performing these tasks.
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Principles of Marketing
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