Setting the promotion budget so as to match the budgets of the competitors is characteristic of which of the following budget methods?
Setting the promotion budget so as to match the budgets of the competitors is characteristic of competitive-parity budget methods.
Competitive-parity budgeting is a method of setting a promotion budget that matches or is in line with the budgets of the major competitors in the same market or industry.
This method is based on the belief that the competitor's budget reflects what is necessary to compete effectively and that a similar budget should be allocated to maintain a similar level of competitiveness.
The competitive-parity method helps ensure that a company does not fall behind its competitors in terms of marketing and promotion activities.
However, this method does not take into account a company's specific strengths, weaknesses, or unique selling proposition, so it may not always be the best approach for every company.