Competitive Parity Method For Calculating Advertising budget

The firm must carefully study Competitive information regarding their sales, distribution pattern and advertising. It will provide the correlation between the competitive sales and advertising effort. Depending on the firm’s strategy of increasing market share or steadying the share, decision can be made to have a bigger or smaller budget than competition. Instead of reacting to competitor advertising results, firms can be proactive in their approach by planning their own goals of marketing and then the advertising budget will emerge.