PLEASE - I DO NOT KNOW HOW TO FIGURE THIS OUT - GOT ALL THE QUESTIONS WRONG

Philip is the owner of Chemise Company, which sells custom-cut men's professional shirts manufactured with the highest quality cotton and materials. Philip 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. If Philip's goal is to maximize his profit, which advertising tactic should he adopt?

Online advertising due to its low CPM Incorrect

Television advertising due to its large audience size

Magazine advertising despite its 42 percent margin

To minimize costs, Philip should not use advertising.

Direct mail/refer a friend, despite the $694 CPM

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?

Yes, because the television ad results in 228 new customers. Incorrect

Yes, because the television ad's audience size is 3,520,000 and ad recall is 17 percent.

No, because television advertising reduces sales as compared to the no advertising condition.

No, because television advertising has the highest CPM.

No, because the ad's expense and lack of offsetting sales reduces the firm's profit by $54,000.

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?

$432,200 Incorrect

$424,680

$500,440

$458,560

$442,120

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?

9,000 Incorrect

12,000

15,000

18,000

10,000

5. Reset the television data to its initial values. Assume Philip wants to run two advertising campaigns. Which advertising campaign should Philip fund in addition to direct mail/refer a friend to balance exposure and profit?

Magazine advertising + Direct mail/Refer a friend Incorrect

Television advertising + Magazine advertising

Television advertising + Direct mail/Refer a friend

Only direct mail/Refer a friend

Online advertising + Direct mail/Refer a friend

Refer to the formulas above and the spreadsheet provided to help answer the questions that follow. The spreadsheet fields highllghted 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 Refer to the formulas above and the spreadsheet provided to help answer the questions that follow. The spreadsheet fields highllghted 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