Diversey Paint and Supply Advertising Program for Do-It-Yourself Tools A Media Selection Problem 8-6, page 322 Jan White, BUS340

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 Jan White, BUS340

City: 0.04X1 + 0.05X2 >= 0.4 Exposure level (40%) Objective: Select the least costly method that will meet the desired exposure level Equation: Minimum cost = 925X1 + 2000X2; where X1 is newspaper ads and X2 is television ads City: 0.04X1 + 0.05X2 >= 0.4 Exposure level (40%) NW Suburb: 0.03X1 + 0.03X2 >= 0.6 Exposure level (60%) Jan White, BUS340

Equations for City Exposure 0.04X1 + 0.05X2 >= 0.4 When X1 = 0, 0.05X2 = 0.4, so X2 = 8 8 ads x $2000/ad = $16,000 of cost (TV) When X2 = 0, 0.04X1 = 0.4, so X1 = 10 10 ads x $925/ad = $9,250 of cost (Paper) Jan White, BUS340

Equations for NW Suburb Exposure 0.03X1 + 0.03X2 >=0.6 When X1 = 0, 0.03X2 = 0.6, so X2 = 20 20 ads x $2000/ad = $40,000 of cost (TV) When X2 = 0, 0.03X1 = 0.6, so X1 = 20 20 ads x $925/ad - $18,500 of cost (Paper) Jan White, BUS340

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. Jan White, BUS340