You are on page 1of 4

Assignment Quantitative Methods

Assignment
Ltd.

Advertising Strategy of Popular Motors

Professor

Mr. D M Marathe

Class

MFM 2016-2019- SEM I

Group

01

Roll No

02,03,05,06,07,08,09,10

Case Problem: Advertising Strategy

Popular Motors Ltd has hired a marketing firm Ad factors to develop an advertising
strategy for promoting its used-car sales. Ad factors has recommended that
company use spot announcements on both television and radio as the advertising
media for the proposed promotional campaign. Advertising strategy guidelines are
expressed as follows:

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


2. Do not use more than 25 radio announcements.
3. The number of radio announcements should be at least the number of
television announcements.
The televisions station has quoted a cost of 1200 per spot announcement, and
the radio station has quoted 300 per spot announcement. Popular Motors
advertising budget has been set as 25500. The marketing services firm has rated
the various advertising media in terms of audience coverage and recall power of
the advertising. The television announcement is rated at 600, and the radio
announcement is rated at 200. Popular Motors 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.

Popular Motors president believes the television station will consider running the
Popular Motors spot announcement on its highly rated evening news program (at
the same cost) if Popular Motors will consider using additional television
announcement.

Perform an analysis of advertising strategy for Popular Motors, and prepare a


report to Popular Motors president presenting your findings and
recommendations. Include (but do not limit your discussion to) a consideration of
the following:

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


2. The relative merits of each advertising medium.
3. The news program rating the television that would be necessary 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 are binding.
6. The best use of any possible increase in the advertising budget and effect
of that on total rating.
7. Any other information that may help Popular Motors president makes the
advertising strategy decision.

Solution:
Formulation
Radio

Television

Objective

ZMAX =200X + 600Y

Constraints:
1. Use at least 30 announcements for combined television and radio coverage.
X+Y>=30
2. Do not use more than 25 radio announcements.
X<=25
3. The number of radio announcements should be at least the number of
television announcements.
X>=Y
4. The Cost per spot for Television is 1200/- and for Radio is 300/- and total
budget is 25500/300X+1200Y<=2550/-

Findings & Recommendation:


The Popular Motors President should use 25 Radio and 15 Television spot
announcements to maximize the overall rating of the advertising campaign.
Question 1:
The recommended number of television and radio spot announcements.
Solution
Parameter
OFC (Max Audience Coverage)
C1 (Combined Radio and TV
announcements)
C2 (Radio announcements)
C3(Radio announcements >= TV
announcements)
C4 (Cost per spot announcements and
budget)
ANSWER:
Zmax
C1
C2
C3
C4

25
Radio(
X)
200

15
Television
(Y)
600

Constraints

1
1

1 GE
0 LE

30
25

1 GE

300

1200 LE

25500

14000
40
25
40
25500

As per the above solution the recommended TV & Radio Spot


announcements are 25 for Radio and 15 for TV . As it satisfies the first
condition of combine Radio & TV announcements should be at least 30.
Question 2:
The relative merits of each advertising medium.
Radio:
1.The Cost per spot is less as compared to Television.
2.As the cost is less popular motors can have a more no. of spot on radio it will
increase audience reach
Television:
1.As the television announcement is rated higher i.e 600 it will create bigger impact
as compare to Radio.
Question 3:
The news program rating the television that would be necessary before it would
make sense to increase the number of television spots.
As the News program is highly rated it would be beneficial to increase the
TV spots as it would increase the audience base.
Question 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.
Question 5:
The restrictions placed on the advertising strategy that are binding.
Budget Constraint i.e Rs.25500/Question 6:
The best use of any possible increase in the advertising budget and effect of that on
total rating.
An increase in the advt budget will have likely result of more TV
announcements being preferred to Radio as it will have maximum effect.
Question 7:
Any other information that may help Popular Motors president makes the
advertising strategy decision.

You might also like