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Diversey Paint and Supply Advertising Program for Do-It-Yourself Tools

Diversey Paint and Supply Advertising Program for Do-It-Yourself Tools

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Diversey Paint and Supply Advertising Program for Do-It-Yourself Tools

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  1. Diversey Paint and SupplyAdvertising Program for Do-It-Yourself Tools A Media Selection Problem 8-6, page 322 Jan White, BUS340

  2. ½ page newspaper ad, costing $925 per ad TV ad, costing $2000 per ad No budgetary constraint, objective is to minimize cost of advertising City audience for TV ad is 5% per ad, 4% for newspaper ad Suburban audience for TV and newspaper ads is 3% for each Desired exposure level is 40% for city, 60% for the NW suburb Media Types and Information Jan White, BUS340

  3. Objective: Select the least costly method that will meet the desired exposure level • Equation: Minimum cost = 925X1 + 2000X2; where X1 is newspaper ads and X2 is television ads • City: 0.04X1 + 0.05X2 >= 0.4 Exposure level (40%) • NW Suburb: 0.03X1 + 0.03X2 >= 0.6 Exposure level (60%) Jan White, BUS340

  4. Equations for City Exposure • 0.04X1 + 0.05X2 >= 0.4 • When X1 = 0, 0.05X2 = 0.4, so X2 = 8 • 8 ads x $2000/ad = $16,000 of cost (TV) • When X2 = 0, 0.04X1 = 0.4, so X1 = 10 • 10 ads x $925/ad = $9,250 of cost (Paper) Jan White, BUS340

  5. Equations for NW Suburb Exposure • 0.03X1 + 0.03X2 >=0.6 • When X1 = 0, 0.03X2 = 0.6, so X2 = 20 • 20 ads x $2000/ad = $40,000 of cost (TV) • When X2 = 0, 0.03X1 = 0.6, so X1 = 20 • 20 ads x $925/ad - $18,500 of cost (Paper) Jan White, BUS340

  6. Comparison and Selection • 40% City exposure costs $16,000 (TV) and $9,250 (Newspaper), with 8 and 10 ads respectively. • 60% NW Suburb exposure costs $40,000 (TV) and $18,500 (Newspaper), with 20 ads of each. • In order to meet the minimum exposure constraint for both the City and the NW Suburb, and to minimize advertising cost, we will select the 20 - ½ page newspaper ads costing $925 each. Jan White, BUS340