Which budgeting method is defined as having "no system," often resulting in random decisions?

The arbitrary allocation method is characterized by its lack of a systematic approach to budgeting. In this method, budget allocations are often made without a concrete analytical basis or strategic considerations, leading to decisions that can appear random or based on impulse rather than established metrics or performance indicators.

This approach tends to be more suitable for organizations that may lack specific marketing objectives or detailed market research, relying instead on intuition or past experiences. It does not take into account factors like sales forecasts, market conditions, or competitive landscapes, which are crucial for informed budget decisions in a marketing context.

In contrast, other methods like the percentage of sales or competitive parity approaches base their budgets on quantifiable data or metrics, aiming for a more strategic allocation. These methods involve a structured analysis of past performance or competitive insights, resulting in more calculated and potentially effective budgeting outcomes. The return on investment method focuses specifically on evaluating the financial returns generated by specific marketing expenditures, rather than executing budgeting randomly.