Which of the following is a disadvantage of using a percentage-of-sales method to determine the marketing communications budget?
A) It assumes competitors know better than the company's own planners.
B) It results in high communication expenditures irrespective of what the company can afford.
C) It is overly focused on the relationship among communication cost, selling price, and profit per unit.
D) It treats sales as what determines communication, rather than as the result of effective communication.
E) It is too focused on long-range planning.

Question

Quizplus · Accepted Answer

The percentage-of-sales method assumes that sales drive the budget for marketing communications, not recognizing that effective communication can actually be a driving force behind sales. This approach can lead to under-investment in marketing during times when increasing communication efforts could stimulate sales.

Which of the Following Is a Disadvantage of Using a Percentage-Of-Sales