Question

November 27, 2015, Forbes announced that Google's Chromecast attained a 35% market share in the digital...

November 27, 2015, Forbes announced that Google's Chromecast attained a 35% market share in the

digital media streamer market, while Apple attained 20% market share. Because of this, executives at Apple

want to use comparative parity budgeting in an attempt to match Google's market share. By how much will

executives have to raise share of voice to achieve their desired market share growth?

Can you please explain any formula/all steps

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Answer #1

Comparity Parity Budget is a variant of the percentage of sales approach. A firm sets its budget solely depending upon the basis of competitors expenditure. The advertising cost is decided on the basis of spending for advertising by the competitors in the same industry.

Two arguments are advanced for this method. One is that the competitors’ expenditures represent the collective wisdom of the industry. The other is that it maintains a competitive parity which helps to prevent promotion wars.

For further details, you require additional data -

Current Advertising Cost for Chromecast

Current Advertising Cost for Apple

Answer = (Current Advertising Cost for Chromecast - Current Advertising Cost for Apple)/Current Advertising Cost for Apple

I hope this comes out to be 22.5%

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