The percentage-of-sales method of setting an advertising budget wrongly treats sales as a cause of promotion rather as a result.

Question

Quizplus · Accepted Answer

The percentage-of-sales method assumes that sales are the cause of advertising, which is not true. Promotion and advertising are often the cause of sales, so it is important to consider other factors such as market competition, customer preferences, and the effectiveness of past promotions when setting an advertising budget.

The Percentage-Of-Sales Method of Setting an Advertising Budget Wrongly Treats