In: Accounting
Describe the processes used to determine promotion budget and mix.
• The Affordable Method: Setting a promotion budget at what a company thinks they can afford
• Percentage of Sales Method: Setting a promotion budget at a certain percentage of current or forecasted sales or a percentage of the sales price
• Competitive Parity Method: Setting a promotion budgets to match competitors’ budgets
• Objective and Task Method: Marketers develop their promotion budgets by defining specific objectives, determining tasks that must be performed to achieve these objectives and estimating the costs of performing them