Disadvantages of % of sales method of estimating budget



1. It treats advtg as an expense associated with making a sale rather than an investment.

2. It does not allow for changes in strategy either internally or from competitors. An aggressive company may wish to allocate more budgets to advtg& promotions, a strategy that is not possible with % of sales method.

3. May lead to severe misappropriation of funds.Succesful products may have excess budgets.


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