Which of the Following Is a Major Problem Associated with the Percentage-Of-Sales

question 24

Multiple Choice

Which of the following is a major problem associated with the percentage-of-sales method?

• A)It reverses the cause-and-effect relationship between advertising and sales.
• B)It is financially unsafe.
• C)It is extremely tough to implement.
• D)It is used only by firms that do not understand the role of advertising and promotions.
• E)It has no theoretical basis, and the budgetary amount is often set using a flat-ratE.The percentage-of-sales method has some serious disadvantages; letting the level of sales determine the amount of advertising and promotions dollars to be spent reverses the cause-and-effect relationship between advertising and sales.

---

Definitions:

Negligence

The failure to take proper care in doing something, leading to damage or injury to another.

Severe Injuries

Substantial physical harm or damage to a person's body that requires medical attention and may lead to long-term or permanent disability.

Misrepresentations

False or misleading statements that can render a contract void or voidable if relied upon by the aggrieved party.

Principal

The primary party or individual involved in a contract or agreement, often responsible for the obligations and benefits of the contract.