Advertising strategy case problem

Assignment Help Financial Management

Reference no: EM13849718

Advertising Strategy Case Problem- I can't seem to get the numbers right with this problem. Can someone show me step-by-step how to solve this problem?

Duke Motors, Inc., has hired a marketing services firm to develop an advertising strategy for promoting Duke’s used car sales. The marketing firm has recommended that Duke use spot announcements on both television and radio as the advertising media for the proposed promotional campaign. Advertising strategy guidelines are expressed as follows:

-Use at least 30 announcements for combined television and radio coverage.

-Do not use more than 25 radio announcements.

-The number of radio announcements cannot be less than the number of television announcements.

The television station has quoted a cost of $1200 per spot announcement, and the radio station has quoted a cost of $300 per spot announcement. Duke’s advertising budget has been set at $25,500. The marketing services firm has rated the various advertising media in terms of audience coverage and recall power of the advertisement. For Duke’s media alternatives, the television announcement is rated at 600 and the radio announcement is rated at 200. Duke’s president would like to know how many television and how many radio spot announcements should be used to maximize the overall rating of the advertising campaign.

Duke’s president believes that the television station will consider running the Duke spot announcement on its highly rated evening news program (at the same cost) if Duke will consider using additional television announcements.

MANAGERIAL REPORT

Perform an analysis of advertising strategy for Duke Motors and prepare a report to Duke’s president presenting your findings and recommendations. Include, but do not limit your discussion to, a consideration of the following items.

1) The recommended number of television and radio spot announcements.

2) The relative merits of each advertising medium.

3) The rating that would be necessary for the news program before it would make sense to increase the number of television spots.

4) The number of television spots that should be purchased if the news program is rated highly enough to make increasing the number of television spots advisable.

5) The restrictions placed on the advertising strategy that Duke might want to consider relaxing or altering.

6) The best use of any possible increase in the advertising budget.

7) Any other information that may help Duke’s president make the advertising strategy decision.

Can you also include?

- a formulation of the problem with decision variables clearly defined

-a copy of your spreadsheet with formulas exposed;

- the answer report (generated by Solver)

- the sensitivity report (generated by Solver).

Reference no: EM13849718

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