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. 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, adio, and newspaper advertising.The television budget should be at least $140,000 The radio advertising budget is restricted to a maximum of $99,000.Useno more than 20 television advertisements.Useat least twice as many radio advertisements as television advertisements To balance the advertising campaign and make use of all advertising media, Flamingo's management team also adopted the following guidelines. Because of management's concern with attracting new customers, management stated that the advertising campaign must reach least 100,000 new customer. Alamingo's management team accepted maximizing the total exposure rating across all media as the objective of the advertising campaign. Similarly, for newspaper ads, the preceding data are reliable up to a maximum of 20 the exposure rating dedines to 5 and the potential mumber of new customers reached dedines to 300 for additional ads. Beyond 15 ads, the exposure rating declines to 20 and the number of new customers reached declines to 1200 per ad. For radio anks, the preceding data ar reliable up to a maximum of 15 ads. For planning pur- poses, HJ recommended reducing the exposure sting to 55 and the estimate of the poten tial new customers reached to 1500 for any television and beyond 10. After 10 ak, the benefit is expected to dedine. For television, HJ stated that the exposure sting of 90 and the 4000 new customers reached per ad were reliable for the first 10 television ads. At this point, the HJ consultants pointed out that the data concerning exposure and reach were only applicable to the first few anks in each medium. As expected, the more expensive television advertisement has the highest exposure effectiveness rating along with the greatest poten tial for reaching new customers. It is a function of such things as image, message re- call, visual and medio epeal, and so on. Exposure Rating per Ad Advertising Media Television Radio Newspaper New Customers per Ad 4000 2000 1000 Cost per Ad $10.000 $ 3.000 $ 1.000 25 10 The exposure ting is viewed a masure of the value of the ad to both existing aus tomers and potential new customers. The budget has been set $279,000 h 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 customes reached perad, and the cost for each ad. The management team requested HU'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). Transcribed image text: Case Problem 1 PLANNING AN ADVERTISING CAMPAIGN The Flamingo Grill is an upscale restaurant located in St.
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