Question

Limitations of the _______ budgeting method include not allowing firms to exploit the unique opportunities or problems they confront in a market. If all competitors use this method to set communication budgets, their market shares will stay approximately the same over time.

A. percentage-of-sales
B. objective-and-task
C. available budget
D. competitive parity

Answer 1

Answer: (D) Competition parity

Explanation:

 The competition parity is one of the type competition based method that is used for determining the various types of promotional activities for allocating the advertising budget in an organization.

This type of strategy is basically used for comparing the budget with the other competitors and it is also known as defensive type of strategy.

It also helps a business for protecting its specific products and the brands in the market without overspending in the specific area. Therefore, Option (D) is correct.