MANAGEMENT

Detailed explanation-1: -Business-to-business companies generally spend between 2%-5% of their revenues on advertising. On the other hand, business-to-consumer companies generally spend between 5%-10% of their revenues on advertising.

Detailed explanation-2: -Percentage of Sales Method When using this method an advertiser takes a percentage of either past or anticipated sales and allocates that percentage of the overall budget to advertising.

Detailed explanation-3: -The unit of sale decides the size of the budget. In the unit-of-sales method, you set aside a fixed sum for each unit of product to be sold, based on your experience and trade knowledge of how much advertising it takes to sell each unit. The unit of sale is the basis of budgeting for durable goods and industrial goods.

Detailed explanation-4: -Revenue-based. Some businesses might allocate between 6.5% and 8.5% for marketing purposes. The percentage may be higher for newer business ventures. Businesses under five years old should consider spending 10% to 12% on marketing.

Detailed explanation-5: -1. Percentage of Sales Method: It is a commonly used method to set advertising budget. In this method, the amount for advertising is decided on the basis of sales.