Which of the Following Is a Major Problem Associated with the Percentage-Of-Sales

Multiple Choice

Which of the following is a major problem associated with the percentage-of-sales method?

A) It reverses the cause-and-effect relationship between advertising and sales.
B) It is financially unsafe.
C) It is extremely tough to implement.
D) It is used only by firms that do not understand the role of advertising and promotions.
E) It has no theoretical basis, and the budgetary amount is often set using a flat-ratE.The percentage-of-sales method has some serious disadvantages; letting the level of sales determine the amount of advertising and promotions dollars to be spent reverses the cause-and-effect relationship between advertising and sales.