Philip is the owner of Chemise Company, which sells custom-cut men's professional shirts manufactured with the...

   

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Philip is the owner of Chemise Company, which sells custom-cut men's professional shirts manufactured with the highest quality cotton and materials. Phillip wants to grow his business and therefore is considering a number of advertising tactics to Increase his sales in the professional attire market. He conducted marketing and industry research to gather information to assist him in his decision making. The results of his research were captured in a spreadsheet for his analysis. While Philip doesn't have much experience with advertising, he has been able to narrow his options to four tactics. One tactic he is considering is television advertising in the form of a 30-second commercial. A second alternative is online advertising through strategically placed banner advertisements. A third option is magazine advertising with a half-page ad in Men's Health magazine. The final tactic Philip is contemplating is a direct mail refer-a-friend program, which encourages current customers to reflect upon and share their positive Chemise Company experiences with friends and family. The goal of this activity is to evaluate advertising tactics using key advertising and profitability metrics. Recall that CPM (Cost of ad/Audience size) x 1000. = Refer to the formulas above and the spreadsheet provided to help answer the questions that follow The spreadsheet fields highlighted in yellow can be changed in order to determine possible outcomes. You can find the initial values in the corresponding blue cells in columns G to J. Start by entering the initial values into columns C to F Then review the questions below and adjust the values in columns C to F to determine the correct answers 1 2 Shirts sold 3 Shirt price 4 5 6 7 8 9 10 Audience size 11 12 13 14 Annual sales Expenses (except advertising) Cost of advertising Profit Margin Cost per thousand (CPM) Ad recall Awareness increase 15 Purchase intent increase 19 20 16 17 New customers 18 Sales from new customers B Without Advertising 7,200 $ 120.00 $ $ 864,000 $ Television Advertising $ 475,200 $ $ $ 388,800 $ 45% 0 C 120.00 $ 0 $ 0 $ 0 $ NaN NaN 17% 5% 1% Magazine Online Advertising Advertising. (2,160) $ (259,200) D 120.00 $ 0 $ 0 $ 0$ NaN NaN E 7% 5% 4% 120.00 S 0 $ 0$ 0 $ NaN NaN Direct Mail/Refer a Friend 10% 4% 2% F Initial Value: Television Advertising 120.00 $ NaN 7,960 8,640 8,370 120.00 $ 120.00 $ 120.00 S 0$ 955,200 $1,036,800 $1,004,400 $ 0 $ 525,360 $ 570,240 $ 552,420 S 8,000 $27,300 $ 458,560 $424,680 S 44% 0$ 70% 52% 24% $ 95,000 $ 334,840 $ 35% NaN S 3,520,000 H Initial Value Online Advertising 26.99 $ 17% 5% 1% (3,600) (2,880) -4680 228 $ (432.000) $ (345,600) $ (561,600) $ 27,350 $ 1,466,000 5.46 $ 7% 5% 4% Initial Value Magazine Advertising 720 8 86,400 $ 42% 1,866,600 14.63 S 10% 4% Initial Value Direct Mal/Refer a Friend 2% 468 56,100 $ 9,000 120.00 1,080,000 594,000 5,000 481,000 45% 7,200 604.44 70% 52% 24% 1170 140,400 1. If Philip's goal is to maximize his profit, which advertising tactic should he adopt? (Click to select) 2. Philip digs deeper into the data and notices that the television advertisement exposes the largest number of his consumers to his custom professional shirts. Would you recommend that Philip use television advertising? (Click to select) 3. Philip receives disappointing news from the research team. They feel they overestimated the response to the direct mail campaign Adjust the direct mail/refer a friend sales to a more realistic 15 percent increase over the "without advertising condition from the initial 25 percent increase. After the adjustment, what is the new direct mail/refer a friend profit? (Click to select) 4. Philip wants to use television advertising to maximize his brand exposure so he negotiates an expense reduction to $75,000. How many shirts would he have to sell to achieve a 40 percent profit margin with the reduced expense? [(Click to select) 5. Reset the television data to its initial values. Assume Philip wants to run two advertising campaigns. Which advertising campaign should Phillip fund in addition to direct mall/refer a friend to balance exposure and profit? (Click to select) Philip is the owner of Chemise Company, which sells custom-cut men's professional shirts manufactured with the highest quality cotton and materials. Phillip wants to grow his business and therefore is considering a number of advertising tactics to Increase his sales in the professional attire market. He conducted marketing and industry research to gather information to assist him in his decision making. The results of his research were captured in a spreadsheet for his analysis. While Philip doesn't have much experience with advertising, he has been able to narrow his options to four tactics. One tactic he is considering is television advertising in the form of a 30-second commercial. A second alternative is online advertising through strategically placed banner advertisements. A third option is magazine advertising with a half-page ad in Men's Health magazine. The final tactic Philip is contemplating is a direct mail refer-a-friend program, which encourages current customers to reflect upon and share their positive Chemise Company experiences with friends and family. The goal of this activity is to evaluate advertising tactics using key advertising and profitability metrics. Recall that CPM (Cost of ad/Audience size) x 1000. = Refer to the formulas above and the spreadsheet provided to help answer the questions that follow The spreadsheet fields highlighted in yellow can be changed in order to determine possible outcomes. You can find the initial values in the corresponding blue cells in columns G to J. Start by entering the initial values into columns C to F Then review the questions below and adjust the values in columns C to F to determine the correct answers 1 2 Shirts sold 3 Shirt price 4 5 6 7 8 9 10 Audience size 11 12 13 14 Annual sales Expenses (except advertising) Cost of advertising Profit Margin Cost per thousand (CPM) Ad recall Awareness increase 15 Purchase intent increase 19 20 16 17 New customers 18 Sales from new customers B Without Advertising 7,200 $ 120.00 $ $ 864,000 $ Television Advertising $ 475,200 $ $ $ 388,800 $ 45% 0 C 120.00 $ 0 $ 0 $ 0 $ NaN NaN 17% 5% 1% Magazine Online Advertising Advertising. (2,160) $ (259,200) D 120.00 $ 0 $ 0 $ 0$ NaN NaN E 7% 5% 4% 120.00 S 0 $ 0$ 0 $ NaN NaN Direct Mail/Refer a Friend 10% 4% 2% F Initial Value: Television Advertising 120.00 $ NaN 7,960 8,640 8,370 120.00 $ 120.00 $ 120.00 S 0$ 955,200 $1,036,800 $1,004,400 $ 0 $ 525,360 $ 570,240 $ 552,420 S 8,000 $27,300 $ 458,560 $424,680 S 44% 0$ 70% 52% 24% $ 95,000 $ 334,840 $ 35% NaN S 3,520,000 H Initial Value Online Advertising 26.99 $ 17% 5% 1% (3,600) (2,880) -4680 228 $ (432.000) $ (345,600) $ (561,600) $ 27,350 $ 1,466,000 5.46 $ 7% 5% 4% Initial Value Magazine Advertising 720 8 86,400 $ 42% 1,866,600 14.63 S 10% 4% Initial Value Direct Mal/Refer a Friend 2% 468 56,100 $ 9,000 120.00 1,080,000 594,000 5,000 481,000 45% 7,200 604.44 70% 52% 24% 1170 140,400 1. If Philip's goal is to maximize his profit, which advertising tactic should he adopt? (Click to select) 2. Philip digs deeper into the data and notices that the television advertisement exposes the largest number of his consumers to his custom professional shirts. Would you recommend that Philip use television advertising? (Click to select) 3. Philip receives disappointing news from the research team. They feel they overestimated the response to the direct mail campaign Adjust the direct mail/refer a friend sales to a more realistic 15 percent increase over the "without advertising condition from the initial 25 percent increase. After the adjustment, what is the new direct mail/refer a friend profit? (Click to select) 4. Philip wants to use television advertising to maximize his brand exposure so he negotiates an expense reduction to $75,000. How many shirts would he have to sell to achieve a 40 percent profit margin with the reduced expense? [(Click to select) 5. Reset the television data to its initial values. Assume Philip wants to run two advertising campaigns. Which advertising campaign should Phillip fund in addition to direct mall/refer a friend to balance exposure and profit? (Click to select)