Compare the competition-matching approach with the arbitrary approach in determining an advertising appropriation. Which method might more easily lead to overspending or underspending on the appropriation?
What will be an ideal response?
The competition-matching approach is one of the ways to determine advertising appropriation. Marketers following this approach try to match their major competitors' appropriations in absolute dollars or to allocate the same percentage of sales for advertising that their competitors do. Although a marketer should be aware of what competitors spend on advertising, this technique should not be used alone because the firm's competitors probably have different advertising objectives and different resources available for advertising. Many companies and advertising agencies review competitive spending on a quarterly basis, comparing competitors' dollar expenditures on print, radio, and television with their own spending levels. Competitive tracking of this nature occurs at both the national and regional levels. At times, marketers use the arbitrary approach, which usually means a high-level executive in the firm states how much to spend on advertising for a certain period. The arbitrary approach often leads to underspending or overspending. Although hardly a scientific budgeting technique, it is expedient.
You might also like to view...
Sharing information ______ provides employees with clear feedback from their superiors regarding organizational goals, developments, and strategies. It also provides a sense of involvement and minimizes doubt and insecurity about how the company is performing.
A. lateral B. horizontal C. downward D. upward
The decision-making discretion of top-level managers is determined partly by external environmental sources such as the industry structure, the rate of market growth in the firm's primary industry, and the degree to which products can be differentiated.
Answer the following statement true (T) or false (F)
In a purchase motivation product grouping, _____
a. goods are categorized by end use b. a market segment is attracted c. impulse items are placed on the low floors in high-traffic locations d. gift items are placed together
The general idea of managing versus leading is that
a. Managing focuses on the day-to-day activities b. Leading maintains status quo c. Managing looks at the big picture d. Leading focuses on the day-to-day activities