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Jan White, BUS3401 Diversey Paint and Supply Advertising Program for Do-It-Yourself Tools A Media Selection Problem 8-6, page 322.

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Presentation on theme: "Jan White, BUS3401 Diversey Paint and Supply Advertising Program for Do-It-Yourself Tools A Media Selection Problem 8-6, page 322."— Presentation transcript:

1 Jan White, BUS3401 Diversey Paint and Supply Advertising Program for Do-It-Yourself Tools A Media Selection Problem 8-6, page 322

2 Jan White, BUS3402 Media Types and Information ½ page newspaper ad, costing $925 per ad TV ad, costing $2000 per ad No budgetary constraint, objective is to minimize cost of advertising City audience for TV ad is 5% per ad, 4% for newspaper ad Suburban audience for TV and newspaper ads is 3% for each Desired exposure level is 40% for city, 60% for the NW suburb

3 Jan White, BUS3403 Objective: Select the least costly method that will meet the desired exposure level Equation: Minimum cost = 925X X 2 ; where X 1 is newspaper ads and X 2 is television ads City: 0.04X X 2 >= 0.4 Exposure level (40%) NW Suburb: 0.03X X 2 >= 0.6 Exposure level (60%)

4 Jan White, BUS3404 Equations for City Exposure 0.04X X 2 >= 0.4 When X 1 = 0, 0.05X 2 = 0.4, so X 2 = 8 8 ads x $2000/ad = $16,000 of cost (TV) When X2 = 0, 0.04X1 = 0.4, so X1 = ads x $925/ad = $9,250 of cost (Paper)

5 Jan White, BUS3405 Equations for NW Suburb Exposure 0.03X X 2 >=0.6 When X 1 = 0, 0.03X 2 = 0.6, so X 2 = ads x $2000/ad = $40,000 of cost (TV) When X 2 = 0, 0.03X1 = 0.6, so X 1 = ads x $925/ad - $18,500 of cost (Paper)

6 Jan White, BUS3406 Comparison and Selection 40% City exposure costs $16,000 (TV) and $9,250 (Newspaper), with 8 and 10 ads respectively. 60% NW Suburb exposure costs $40,000 (TV) and $18,500 (Newspaper), with 20 ads of each. In order to meet the minimum exposure constraint for both the City and the NW Suburb, and to minimize advertising cost, we will select the 20 - ½ page newspaper ads costing $925 each.


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