Chapter 'Review Case Problem Planning an Advertising Campaign 1 The Flamingo Grill is an upscale restaurant located in St. Petersburg, Florida. To help plan an advertising campaign for the coming season, Flamingo's management team hired the advertising firm of Haskell & Johnson (HJ). The management team requested HI's recommendation concerning how the advertising budget should be distributed across television, radio, and online advertisements. The budget has been set at $279,000. In a meeting with Flamingo's management team, HJ consultants provided the following information about the industry exposure effectiveness rating per ad, their estimate of the number of potential new customers reached per ad, and the cost for each ad: Advertising Media Exposure Rating New Customers Cost per Ad per Ad per Ad Television 90 $10,000 4,000 2,000 Radio 25 $3,000 Online 10 1,000 $1,000 AA ME The exposure raung is viewed as a measure or the value or ne w dour exisung customers anu potenciar new customers. It is a function of such things as image, message recall, visual and audio appeal, and so on. As expected, the more expensive television advertisement has the highest exposure effectiveness rating along with the greatest potential for reaching new customers. At this point, the HJ consultants pointed out that the data concerning exposure and reach were only applicable to the first few ads in each medium. For television, HJ stated that the exposure rating of 90 and the 4000 new customers reached per ad were reliable for the first 10 television ads. After 10 ads, the bencfit is expected to decline. For planning purposes, HJ recommended reducing the exposure rating to 55 and the estimate of the potential new customers reached to 1500 for any television ads beyond 10. For radio ads, the preceding data are reliable up to a maximum of 15 ads. Beyond 15 ads, the exposure rating declines to 20 and the number of new customers reached declines to 1200 per ad. Similarly, for online ads, the preceding data are reliable up to a maximum of 20; the exposure rating declines to 5 and the potential number of new customers reached declines to 800 for additional ads. Flamingo's management team accepted maximizing the total exposure rating, across all media, as the objective of the advertising campaign. Because of management's concern with attracting new customers, management stated that the advertising campaign must reach at least 100,000 new customers. To balance the advertising campaign and make use of all advertising media, Flamingo's management team also adopted the following guidelines: Use at least twice as many radio advertisements as television advertisements management stated that the advertising campaign must reach at least 100,000 new customers. To balance the advertising campaign and make use of all advertising media, Flamingo's management team also adopted the following guidelines: Use at least twice as many radio advertisements as television advertisements. . Use no more than 20 television advertisements. The television budget should be at least $140,000 The radio advertising budget is restricted to a maximum of $99,000 The online budget is to be at least $30,000. HJ agreed to work with these guidelines and provide a recommendation as to how the $279,000 advertising budget should be allocated among television, radio, and online advertising. Mariagerial Report Develop a model that can be used to determine the advertising budget allocation for the Flamingo Grill Include a discussion of the following in your report: 1. A schedule showing the recommended number of television, radio, and online advertisements and the budget allocation for each medium. Show the total exposure and indicate the total number of potential new customers reached 2. How would the total exposure change if an additional $10,000 were added to the advertising budget? Managerial Report Develop a model that can be used to determine the advertising budget allocation for the Flamingo Grill. Include a discussion of the following in your report: 1. A schedule showing the recommended number of television, radio, and online advertisements and the budget allocation for each medium. Show the total exposure and indicate the total number of potential new customers reached. 2. How would the total exposure change if an additional $10,000 were added to the advertising budget? 3. A discussion of the ranges for the objective function coefficients. What do the ranges indicate about how sensitive the recommended solution is to HI's exposure rating coefficients? 4. After reviewing HJ's recommendation, the Flamingo's management team asked how the recommendation would change if the objective of the advertising campaign was to maximize the number of potential new customers reached. Develop the media schedule under this objective. 5. Compare the recommendations from parts 1 and 4. What is your recommendation for the Flamingo Grill's advertising campaign? Case Problem 1: Planning an Advertising Campaign Ten (10) Model Constraints 1) 1T1=100000 6) Use at least twice as many Radio ads as TV ads 7) Use no more than 20 TV ads 8) TV budget should be at least 140,000 9) Radio ad budget is restricted to a maximum of 99,000 10) The newspaper budget is to be at least 30,000 Case studies should include the following: Introduction- Describe briefly background of the case and related theory and concepts you learned in the class. You must also include all questions that you are asked to answer in your case. Methodology- This section clearly details the model and/or quantitative technique that you plan to use to solve your problem. All technique inputs or variables should be clearly explained. Results and Discussion- Provide results for the quantitative technique that you employed and clearly explain the meaning of your results. Summary/Conclusion-Based upon your model results, clearly answer each of the questions outlined in the introduction. Format The project report should include a title, name of students, logical headings, etc. Reports can vary in length, but generally should be of 5-6 pages (Double spaced, 1 inch margins, 12 pt. font, etc.). Additional pages for figures, tables, charts are allowed. Please take a thorough check for report organization, spelling, grammar, use of citations, etc. MS Word is recommended. If you use Excel or Lingo or other software in your project, please attach the Excel worksheet or Lingo file that contains your model