ENTREPRENEURSHIP

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INTRODUCTION TO ENTREPRENEURSHIP

IMPORTANCE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
When an business allocates a certain amount of money in relation to the amount of goods and services that it sold the previous year, it is setting its marketing budget by
A
using the percentage-of-sales method.
B
reviewing industry standards.
C
considering its competitors’ activities.
D
obtaining bids for various marketing activities.
Explanation: 

Detailed explanation-1: -Every business marketing plan should include a marketing budget – a specific amount the business will allocate to promote its goods and services.

Detailed explanation-2: -Top-Down Budgeting Typically, they use a percentage-of-sales method, in which the budget is based on the amount the company spent on advertising in the previous year and the sales in that year.

Detailed explanation-3: -The marketing budget sets out how much money is allocated to the marketing function and how it is intended to spend it.

Detailed explanation-4: -Objectives and Task Method This leads to a circular cycle of declining sales and advertising budget. Hence, this method of ‘objectives and task’ is considered one of the most logical methods among all the budgeting methods in advertising.

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