From the course: Setting a Marketing Budget

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Competitive parity

Competitive parity

- [Narrator] Competitive parity. The competitive parity method of budget setting involves discovering what the competition is spending and then matching or exceeding it. This can be important if you're in a highly competitive marketplace. In fact, it might be business critical. Much information is readily available either via published company accounts, industry reporting, or via media and research agencies. However, this method also assumes that your competitors are spending the right amount and have a comparable business to yours. If nothing else, you should consider competitor spend in relation to their revenue and your own revenue. Whether you decide to set your budget by the competitive parity method or not, it's always useful to keep an eye on what your competitors are doing or not doing when it comes to marketing activity.

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