Question: 8.8 TV Ads Selection Strategy i2 Two competing mobile phone companies, Telefonita and Vodazone, are sponsors of Formula 1 motor-racing teams and motorcycle teams. For

8.8 TV Ads Selection Strategy i2 Two competing

8.8 TV Ads Selection Strategy i2 Two competing mobile phone companies, Telefonita and Vodazone, are sponsors of Formula 1 motor-racing teams and motorcycle teams. For the next season, both firms are thinking of employing more sponsorship by using three 3-minute sponsorship-related ads inserted between the corresponding TV broadcasts of both competitions. Formula 1 is broadcast on TV5, while the motorcycle races are broadcast on Tele 1. Formula 1 has a larger audience, as reflected in its mean audience share of 49 % as opposed to 17 % for motorcycling. Both firms are considering how to distribute the three ads. However, Telefonita has decided to insert at least one of the ads in each sports broadcast, while Vodazone has not self-imposed this condition. Telefonita and Vodazone have set the objective of maximising the publicity impact of their ads. Telefonita has established that the impact as a percentage of these TV spots can be calculated by the following formula, which agrees with the strategy adopted by both firms: (na_T_F1 - na_V_FI) * Cpm_F1 + (na_T_M - na_V_M) * Cpm_M where na_T_FI is the number of ads inserted by Telefonita on TV5 while the Formula 1 is being broadcast, na_V_F1 is the number of ads inserted by Vodazone 8.8 TV Ads Selection Strategy 297 on TV5 during Formula 1, na_T_Me is the number of ads inserted by Telefonita on Tele 1 while motorcycling is being broadcast, and na_V_Ms the number of ads inserted by Vodazone while the motorcycling races are being broadcast. Cpm_FI and Cpm_M represent the mean audience share for Formula 1 and for motorcycles, respectively. Vodazone also uses the same formulation. (a) Consider this case as if it were a zero-sum game played by two people (b) Solve the game. Obtain the game value; what does it mean

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