Advertising

Review this chapter, which you read earlier in the course. It discusses different methods of communication employed by businesses to reach their customers, the types of message strategies commonly used, and budgetary issues that companies must consider. This time, answer the discussion questions at the end of the chapter.

The Promotion Budget

KEY TAKEAWAY

Companies can determine how much to spend on promotion several different ways. The percent of sales method, in which companies use a set percentage of sales for their promotion, is often the easiest method to use. Small companies may focus on what they think they can afford while other organizations may try to keep their promotions relatively equal to their competitors'. The objective and task approach takes objectives into consideration and the costs of the tasks necessary to accomplish objectives in order to determine the promotion budget.