Integrated Marketing Communications

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$($a$)$ Mentoring Moment: Determining How Much to Spend on Promotion

One of the most challenging tasks for any firm, including In Fine Fettle, is determining how much to spend on promotion. Four basic methods are used for determining a firm's promotional budget: the affordable method, the percentage$-$of$-$sales method, the competitive$-$parity method, and the objective$-$and$-$task method.

Drag each description to the appropriate budgeting method and click Submit.

Affordable Method

In Fine Fettle's management reviews its forecasted sales volume for the turmeric bar and sets is promotional budget at $$150,000.$

In Fine Fettle's management reviews what it is trying to achieve with promotion and sets the budget based on anticipated expenses.

In Fine Fettle looks at its competitors and finds that their average promotional spending ranges from $$100,000$ to $$250,000.$ Therefore, the promotional budget is set at $$200,000.$

Competitive$-$Parity Method

Objective$-$and$-$Task Method

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