MANAGEMENT

Detailed explanation-1: -ADVERTISEMENTS: Company has the tendency to maintain certain per cent (or percentage) of sales as ad budget. Based upon the past, the current and the expected sales, amount for advertising budget is determined. This method is based on the notion that sales follow advertising efforts and expenditure.

Detailed explanation-2: -Companies can use a variety of methods for setting an advertising budget, such as the competitive parity method, the adaptive control method, and the percentage of sales method. A company with a new product or service will generally need to spend more money on advertising in order to generate brand awareness.

Detailed explanation-3: -An advertising budget is an amount set aside by a company planned for the promotion of its goods and services. Promotional activities include conducting a market survey, getting advertisement creatives made and printed, promotion by way of print media, digital media, and social media, running ad campaigns, etc.