The Flamingo Grill is an upscale restaurant located in St. Petersburg, Florida. To help plan an advertising campaign for the coming season, Flamingo's management team hired the advertising firm of Haskell & Johnson (HJ). The management team requested HJ's recommendation concerning how the advertising budget should be distributed across television, radio, and newspaper advertisements. The budget has been set at $279,000.
In a meeting with Flamingo's management team, HJ consultants provided the following 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.
Advertising Media Exposure Rating / Ad New Customers / Ad Cost / Ad
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Flamingo's management team accepted maximizing the total exposure rating, across all media, as the objective of the advertising campaign. Because of management's concern with attracting new customers, management stated that the advertising campaign must reach at least 100,000 new customers. To balance the advertising campaign and make use of all advertising media, Flamingo's management team also adopted the following guidelines.
• Use at least twice as many radio advertisements as television advertisements.
• Use no more than 20 television advertisements.
• The television budget should be at least $140,000.
• The radio advertising budget is restricted to a maximum of $99,000.
• The newspaper budget is to be at least $30,000. HJ agreed to work with these guidelines and provide a recommendation as to how the $279,000 advertising budget should be allocated among television, radio, and newspaper advertising.
Managerial Report
Develop a model that can be used to determine the advertising budget allocation for the Flamingo Grill. Include a discussion of the following in your report.
1. A schedule showing the recommended number of television, radio, and newspaper advertisements and the budget allocation for each media. Show the total exposure and indicate the total number of potential new customers reached.
2. How would the total exposure change if an additional $10,000 were added to the advertising budget?
3. A discussion of the ranges for the
To efficiently create awareness, JanMar would need to produce a cooperate ad with a retail outlet to get the buyer in the store. They would also need to increase sales by 8.3% or $1 million to cover the cost of increase in advertising. (See appendix 1.2).
Question 2: Describe the methods for marketing planning, including business portfolio analysis, the Boston Consulting Group market
Also the CPM will increase to $2,5 because of a dual targeting. In addition to this the average Rating will increase from 1% to 1.2%. Cons: To ensure that there were selections aimed at both segments; Wheeler needs to spend $20,000,000 more on programming. Because of the determination only on this two segments it can be that the number of the loyal viewers of TCF will decrease. Exercise 3: If you were Dana Wheeler, what would you recommend and why? If I was Dana Wheeler I would recommend TCF that they should adopt Scenario 3. However, Scenario 3 has a few disadvantages. For example the possibility to lose some loyal viewers and furthermore TCF has to spend $20,000,000 more on programming which means investing a lot of money for them. But in my opinion, in Scenario 3, the benefits exceed the disadvantages. On the one hand through this Scenario the Net Income will increase more than $100,000,000. In addition to that the CPM will increase to $2,5 and the average Rating will increase from 1% to 1.2%. On the other hand 50% of all US Television Households consist of Fashionistas and Planners/Shoppers. In these two markets the 18-34 year old female audience represents 50% and 25% of the cluster respectively. TCF should therefore increase the advertising revenue. The Scenario 3 is better than the Scenario 2 because Scenario 2 only focuses on the Fashionistas
25-4 The costs of direct-response advertising shall be capitalized if both of the following conditions are met:
Advertisement is conducted on TV, radio, website, poster site, and all kinds of media that
Suppose that the advertising budget is restricted to 31 units. Determine the level of advertising (in units) that maximizes sales subject to this budget constraint.
The following allocation of advertising campaign budget was used to estimate number of new policies sold:
In this case we use the adbudg model. The adbudg model is a sales response model which suggests the optimal level of advertising and when to advertise e.g. how to allocate the advertising budget, do we use it all in the first quarter, how much should we spend etc.
My recommendation is that they do not invest the additional $225,000 in consumer advertising. Considering the additional amount will only be going into magazines which do not provide enough incentive for a purchase decision from the buyer. I believe that Haverwood should allocate the amount 50/50 and invest half
I would put Porsche Winter Equipment sale promotion advertisement on three different newspapers for a 12-week campaign so that to make more people watching Porsche advertisement every week. Then, 24,000 direct mails will be sent to the current Porsche owners. As drivers usually have a habit of listening to the radio, I plan to choose 14 rotators to play Porsche’s advertisement. Because the mid-high income people are the Porsche’s target users, who would have the habit of reading magazines, such as luxury car, real estate, tourism, the economist and business management, I decide to put Porsche’s advertisement on five different magazines. In addition, outdoor wallboard and online advertisement would be effective to attract more potential buyer. Therefore, the total advertisement fee is $379,940; and I think this marketing plan and strategy is acceptable and reasonable.
The first suggest was put forth by the VP of advertising and no surprise he requested more advertising to reach the DIY (do it yourself) market in the DFW and 15 other counties area by $350,000. In order to break even Jones Blair would have to sell $1,000,000=$350,000/.35 of additional product for this to be cost effective in the next year since it is company policy to recoup the expense in the same year. With this advertising they hope to get an awareness level of 30%, which is a 5% increase in awareness. Assuming that this 5% awareness increase leads to a 5% increase
Jones Blair has the responsibility to analyze these options to evaluate the effect on the overall business operations within the firm. The VP of Advertising’s suggestion of $350k increase in to the marketing budget would create an increase in $1 million dollars to recoup the cost of this venture. His philosophy of accessing the do-it-yourselfers would not bring these individuals away from their primary focus which is retail location. The do-it-yourselfers are going to continue to visit Home Depot and other mass marketing stores despite advertising efforts. The cost benefit analysis would not be beneficial to Jones Blair.
Analyses market factor to determine the reach and frequency required for each of the advertising media suggested in the brief.
My tenure at various advertising and promotional agencies has leaded me to play a role in research and analysis to assist in determining