In objective-and-task budgeting for promotions, what are the three steps involved?

• A. Set a fixed percentage of sales; allocate to channels; measure returns.
• B. Define objectives; estimate the tasks and costs needed to achieve them; sum the costs to determine the budget.
• C. Choose channels; buy media; review results.
• D. Estimate costs; adjust to meet budget.

Answer: (B)

This approach bases the promotional budget on what it will take to achieve specific objectives, linking spending directly to planned actions and their expected outcomes. It begins by setting clear objectives for what the promotion should accomplish. Next, it identifies the exact tasks needed to reach those objectives and estimates the cost of each task. Finally, all these estimated costs are added together to determine the total budget. This makes the money align with the activities and results you’re targeting, providing a logical, defendable way to allocate resources and later measure ROI.

Other methods either start from a fixed percentage of past sales, focus only on selecting channels without tying them to objectives, or skip the objective-to-task linkage by just estimating costs and adjusting to fit the budget. Those approaches don’t directly connect what you’ll do to what you want to achieve.