Similarly, for newspaper ads, the preceding data are reliable up to a maximum of 20 the exposure rating declines to 5 and the potential number of new customers reached declines to 800 for additional ads.įlamingo’s management team accepted maximizing the total exposure rating, across all media, as the objective of the advertising campaign. Beyond 15 ads, the exposure rating declines to 20 and the number of new customers reached declines to 1200 per ad. For radio ads, the preceding data are reliable up to a maximum of 15 ads.
For planning pur- poses, HJ recommended reducing the exposure rating to 55 and the estimate of the poten- tial new customers reached to 1500 for any television ads beyond 10. After 10 ads, the benefit is expected to decline. For television, HJ stated that the exposure rating of 90 and the 4000 new customers reached per ad were reliable for the first 10 television ads. As expected, the more expensive television advertisement has the highest exposure effectiveness rating along with the greatest poten- tial for reaching new customers.Īt this point, the HJ consultants pointed out that the data concerning exposure and reach were only applicable to the first few ads in each medium. It is a function of such things as image, message re- call, visual and audio appeal, and so on. The exposure rating is viewed as a measure of the value of the ad to both existing cus- tomers and potential new customers. In a meeting with Flamingo’s management team, HJ consultants provided the follow- ing information about the industry exposure effectiveness rating per ad, their estimate of the number of potential new customers reached per ad, and the cost for each ad. The management team requested HJ’s recom- mendation concerning how the advertising budget should be distributed across television, radio, and newspaper advertisements. To help plan an advertising campaign for the coming season, Flamingo’s management team hired the advertising firm of Haskell & Johnson (HJ). The Flamingo Grill is an upscale restaurant located in St. Compare the recommendations from parts 1 and 4.Case Problem 1 PLANNING AN ADVERTISING CAMPAIGN Develop the media schedule under this objective.ĥ. After reviewing HJ’s recommendation, the Flamingo’s management team asked how the recommendation would change if the objective of the advertising campaign was to maximize the number of potential new customers reached. What do the ranges indicate about how sensitive the recommended solution is to HJ’s exposure rating coefficients?Ĥ. A discussion of the ranges for the objective function coefficients. How would the total exposure change if an additional $10,000 were added to the advertising budget?ģ. Show the total exposure and indicate the total number of potential new customers reached.Ģ. A schedule showing the recommended number of television, radio, and newspaper advertisements and the budget allocation for each medium. Include a discussion of the following items in your report:ġ.
Develop a model that can be used to determine the advertising budget allocation for the Flamingo Grill.
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