A Downside to Using the Percentage of Sales Approach in Budgeting

question 80

True/False

A downside to using the percentage of sales approach in budgeting is that it reverses the assumed cause-and-effect relationship between advertising and sales.

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Definitions:

Segmentation Process

The practice of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior, who might require separate products or marketing strategies.

Segmenting Markets

The practice of dividing a broad target market into subsets of consumers with common needs or characteristics and then designing and implementing strategies to target them.

STP Process

Stands for Segmentation, Targeting, and Positioning, a strategic approach in marketing that divides a broad market into distinct groups, targets specific segments, and positions a brand to meet the needs of selected segments.

Geodemographic Segmentation

A marketing technique that clusters people based on the premise that individuals who live near one another are likely to have similar financial means, tastes, and lifestyles.