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In: Accounting

Which method of promotional budgeting should a small retailer and a large retailer use? Why?

Which method of promotional budgeting should a small retailer and a large retailer use? Why?

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Expert Solution

Ques. Which method of promotional budgeting should a small retailer and a large retailer use? Why?

Ans. Small retailer should use newspaper advertisement and a large retailers should use television advertisement for promotional budgeting. Small retailer should use newspaper advertisement because small retail business have reach to limited local customers of that area and newspapers suits there requirement. Reason for use of newspapers is there limited cost and a wide reach in local areas. This will easily help small retailer to boost there sales in there areas whereas keeping the advertisement cost limited at same time. On the other hand  television advertisement is preferred for large retailers because this form of advertisement has a wider reach in terms of number of customers and area covered by it. For large retailers cost spent on television advertisement is easily absorbed by profits on increased sales due to advertisement. Besides large retailers have multiple outlets, so one advertisement boost sales of all outlets. This is the reason for preference of television advertisement for large retailers.


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