MANAGEMENT

Detailed explanation-1: -A revenue-based approach to set an advertising budget looks at last year’s sales figures and designates a percentage of that income towards marketing and advertising. In general, most small businesses allocate around 7 to 8% of their gross revenue towards their advertising budget.

Detailed explanation-2: -A common rule of thumb is that B2B companies should spend between 2 and 5% of their revenue on marketing. For B2C companies, the proportion is often higher-between 5 and 10%. This is because B2C companies typically need to invest in more marketing channels to reach various customer segments.

Detailed explanation-3: -Due to its simplicity, the percentage of sales method is the most commonly used by small businesses. 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.