Definition of competitive-parity method

competitive-based approach used to determine an advertising budget wherein an advertiser decides advertising dollars to be spent on the basis of competitors' spending. A problem with this method is that not only does it assume that all competitors' marketing objectives are the same but also that it leaves an advertiser subject to the same mistakes the competitor may make. Additionally, information concerning competitive-advertising expenditures is only available after the money has actually been spent; thus the advertiser who uses this method is always functioning on other companies' past results.