Question

In the blank budget method for IMC, the budget is set essentially by the amount left over and not allocated elsewhere.

a) Competitive parity

b) Percentage-of-sales

c) Objective-and-task

d) Available

Answer 1

The 'available budget' method in IMC refers to allocating leftover funds to marketing after other business expenses have been covered, which may not be the most efficient way to ensure allocative efficiency in line with company goals.

Step-by-step explanation:

The question refers to a method of budgeting within Integrated Marketing Communications (IMC) where the budget is determined by the funds remaining after other allocations have been made. This method is described by the term 'available budget' method. Unlike the 'percentage-of-sales' or 'competitive parity' methods which are based on industrial norms or the sales figure, the available budget method does not start with any specific marketing objectives. It is essentially a budget constraint that prioritizes other expenditures over marketing, and only allocates what is left to the IMC efforts.

The available budget method can have implications on allocative efficiency, which is when the mix of goods and services produced matches what society most desires. In the context of business budgeting, this would mean allocating funds in a way that optimally supports the company's goals and strategies. However, using a leftover approach may not lead to the most effective or efficient marketing strategy.