Methods of Advertising Appropriation

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Percent of Sales Concept: Advertiser uses a select factor or multiplier such as 3, 5, 7% and then multiply this by the sales figures in rupees and the sum so arrived at is the amount to be spent. Sales figures can be past or future sales for the time period. It might be upon the number of units sold. A specific amount of rupees are allocated to the ad budget for each unit sold. This is a fixed guideline that a specific amount of advertising is required for marketing each unit.

Ad Task or Objective: It is based on established ad objectives and the tasks to be accomplished and then determining the required size of the budget. Here ad is taken as investment and a vehicle for achieving business objectives but is not considered as costs or a result of sales.

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