Reference no: EM13311806

Your client directs TV advertising for a large corporation that currently relies on a single outside advertising agency. For years, ads have been created using the same plan: The agency creates a draft commercial and, after getting your client's approval, completes production and arranges for it to be aired.

Your client's budget is divided between creating and airing commercials. Typically, about 5 percent of the budget is devoted to creating commercials and 95 percent to airing them. Lately the client has become dissatis?ed with the quality of the ads being created. Along with most advertising people, he believes that the ultimate pro?tability of an advertising campaign is much more strongly in?uenced by the content of the advertisement than by the level of expenditure on airing or the media utilized (assuming reasonable levels of expenditure). Thus, he is considering increasing the percentage of his budget devoted to the ?rst, ‘‘creative'' part of the process.

One way to do this is to commission multiple ad agencies to each independently develop a draft commercial. He would then select the one for completion and airing that he determines would be most effective in promoting sales. Of course, since his budget is essentially ?xed, the more money he spends on creating draft commercials the less he has to spend on airing commercials. He will have to pay up front for all of the draft commercials before he has a chance to evaluate them.

The standard technique for evaluating a draft commercial involves showing it to a trial audience and asking what they remembered about it later (this is known as ‘‘next day recall''). Ads with higher next day recall are generally those with higher effectiveness in the marketplace, but the correlation is far from perfect. A standard method for assessing the effectiveness of a commercial afterit has been aired is to survey those who watched the show and estimate ‘‘retained impressions.'' Retained impressions are the number of viewers who can recall the essential features of the ad. Ads with higher retained impressions are usually more effective in generating sales, but again the correlation is not perfect.

Both the effectiveness of a commercial (the number of retained impressions it creates) and the exposure it receives (the number of times it is aired) will in?uence sales.

ASSIGNMENT

Using 'Draft TV Commercials' as your case, complete questions 1, 2, 3, 4, 5, 6, and 8. Do not complete item 7. Here are the question:
1. Explore the mess by answering the following questions:

(a) What do we know?

(b) What can we assume?

(c) What could the results look like?

(d) What information can be brought to bear?

(e) What can we ask the client?

(f) Are there any similar situations or problems?

2. Formulate one or more problem statements.

3. What are the decisions, outcomes, and relationships in the problem?

4. Draw an in¬uence chart for the problem.

5. In what ways could we simplify the problem?

6. What modules will we need to build?

7. What are the key relationships in the problem? Draw their graphs.

8. What are the parameters of the problem?

INFLUENCE CHARTS

Draw in¬uence charts for each of the following problems.