Sam, the owner of a small company, learned that a competitor was planning to spend $150,000 on promotion in the next financial year.

as soon as he learned this, sam called his finance manager and said, "i want to spend $150,000 on promotion next year."

in this case, which method of promotional budgeting does sam use?

a) the objective-and-task method
b) the competitive-parity method
c) the percentage-of-sales method
d) the affordable method
e) the pull-push method

The answer is, The competitive-parity method.

Explanation:

Promotional Budgeting is the process of estimating the expenses for a particular promotional project that is yet to be launched.

The competitive-parity method, primarily assumes that  the other firms have the same marketing objectives and know what they are doing. Based on this, the Advertising-expense budgeting method is decided under the basis of what a brand's or firm's competitors are estimated to be spending.

The other several popular ways to do this are,

reducing the scale of the market for a new product.

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