Assume that you have decided to start your own business after graduating college. Among the many decisions you will have to make, a critical one will be how much to spend promoting your new business and how to allocate those dollars. By understanding the advantages and disadvantages associated with each method of promotional budgeting, you will better understand which budgeting method is best for your business and level of risk tolerance. Determining the appropriate promotional budget is an important decision within any marketing strategy. Firms that set the budget too low risk blending into the competition and are often ineffective in communicating value to potential customers. Firms that set the budget too high open themselves up to waste and lower profits. Promotional budget decisions should consider a variety of factors, such as the types of products sold by the firm, the geographic location of the firm's customers, and the level of competition in the industry. Firms typically determine their promotional budget using one of three methods: (1) the affordable method, (2) the percentage-of-sales method, or (3) the objective-and-task method. Select the appropriate promotional budgeting strategy for each advantage and disadvantage. 1. Bottom up approach focused on what the organization wants to achieve. 2. Fiscally conservative, top-down approach that helps to make sure that promotional elements don't break the budget for your new company 3. Simple method that makes sure that the promotional budget grows as your company grows 4. Guarantees virtually nothing except that the money you allocate will be spent 5. Requires more of your time and judgment to decide on the required tasks 6. Allows the promotional budget to be reduced at times when your company is struggling with lower revenues