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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.