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Comparative advertising has been viewed as an aggressive advertising tactic that is useful in selected situations. However, because of the risks involved, many advertisers are skeptical of using comparative advertising as a long‐term strategy.

Activity‐based costing (ABC) is widely proclaimed to be
revolutionizing the way in which costs are allocated in business.
Instead of allocating overhead costs on volume‐related bases ABC
allocates costs directly to products based on activity
"drivers". Since it is activities which "drive"
costs, the belief is that understanding what causes costs will provide a
more accurate measure of the true cost of a product. This has direct
application to industrial marketing decision making, but the marketing
literature is virtually devoid of its mention. To fill this void this
article first describes ABC and shows shows how changes in the cost
structure of US industry have led to the need for a new approach to cost
allocation. Next, presents case histories which describe the payoffs
which have accrued to industrial marketers who have pioneered in the
application of this new method. Then, outlines procedures for
implementing ABC. Finally, presents numerical examples which demonstrate
the effect of ABC on cost allocation and profits.