JRN 202 Chapter : Grammar Notes1.docx
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Langoustine Restaurant LP Case
The Langoustine is an upscale seafood restaurant located in downtown Seattle, Washington. The restaurant has recently signed a contract with a new highly acclaimed chef and expanded the seating area. In preparation for the coming summer season, the principal owners of the restaurant approved an advertising budget of $279,000 and hired a local advertising firm, ACA Consulting to launch a major advertising campaign.
The ACA consultants provided the management of the restaurant with the following information about the industry exposure effectiveness per ad, their estimate of the number of potential new customers reached per ad, the cost of each ad.
| Television | Radio | Newspaper | |
| EXPOSURE | 85 | 25 | 12 |
| NEW CUSTOMERS REACHED per advertisement | 4,000 | 2,000 | 1,000 |
| COST per advertisement | $10,000 | $3,000 | $1,000 |
The exposure rating is viewed as a measure of the value of the ad to both existing and potential new customers. It is a function of such things as image, message recall, visual and audio appeal, and so on.
At this points, the ACA consultants pointed out that the data concerning exposure rating and new customer reach were only applicable to the first few ads in each medium.
For television, ACA stated that the exposure rating of 85 and 4,000 new customers reached per ad were reliable for the first 10 television ads. After 10 ads, the benefit is expected to decline â the exposure rating from additional television ads declines to 55 and the number of new customers reached goes down to 1500.
For radio ads, the preceding data are reliable up to a maximum of 15 ads. Beyond 15 ads, the exposure rating declines to 18 and the number of new customers reached declines to 1200.
Similarly, for newspaper ads, the exposure rating beyond 20 ads declines to 5 and the number of new customers reached declines to 700.
The table below summarizes the relevant data to account for the âhighâ impact and âlowâ impact ads:
| first 10 TV ads | additional TV ads beyond 10 | First 15 | additional radio ads | first 20 | additional newspaper ads | |
| EXPOSURE | 85 | 55 | 25 | 18 | 12 | 5 |
| NEW CUSTOMERS | 4,000 | 1,500 | 2,000 | 1,200 | 1,000 | 700 |
| COST per | $10,000 | $10,000 | $3,000 | $3,000 | $1,000 | $1,000 |
Assume that the management of the Langoustine accepted maximizing the total number of new customers reached, across all media, as the objective of the advertising campaign. In addition, the following guidelines were adopted:
Use no more than 20 television ads
Allocate at least 140,000 dollars to the television ads
Restrict the radio advertising budget to $90,000 (allocate no more than $90,000 to radio ads)
Allocate at least $30,000 to newspaper budget
Use at least twice as many radio advertisements as television advertisements.
Set the minimum on the total exposure rating from the advertising campaign to 2,000
How many television, radio and newspaper advertisements should be used to maximize number of potential customers reached and meet all of the guidelines and the budget constraint of $279,000
Formulate a linear programming model for this media selection problem (define decision variables, write down the objective function, develop constraints â show all steps/calculations) and solve it using Excelâs Solver. Generate Answer report and sensitivity reports.
Use the Answer and Sensitivity reports to develop a managerial report addressing the following questions (be specific â justify your answers by referring to reduced cost, or range of optimality, or shadow price etc.):
1.How many advertisement for television, radio and newspapers should be used to maximize the number of potential customers reached by the campaign? How will the advertising budget be allocated to each type of media?
2.What will be the total exposure rating of the ad campaign?
3.Would you recommend increasing the current $140,000 limit on advertising budget for television advertisements to 141,000 dollars? Explain/justify your answer.
4.If the current advertising budget of 279,000 was reduced by $1,000 what would be the total number of potential new customers reached?
5.If the estimate of the number of potential new customers reached by the first 15 television ads were revised by ACA downward to 3000 (from 4000), would the budget allocation change? Explain/Justify.
The purpose behind much of advertising is to influence each of the five Consumer Decision Making process (Problem Recognition, Information Search, Evaluation of Alternatives, Product Choice (i.e. Purchase) and Outcomes (i.e. Postpurchase). Each stage of the Consumer Decision Making process has techniques that help consumers to manage the stage and then move onto the next one successfully. Eventually, the consumer moves to purchase (where we get excited to make the sale) but don't underestimate how important the last stage (post purchase) is to making additional sales in the future. Below are guidelines that show basic techiniques used to target and manipulate each Consumer Decision Stage through advertising.
Below are some issues that you will want to consider as you evaluate each of the five chosen advertisements. Please remember that your goal is not simply to answer these questions, but to provide insights into the consumerâs decision making process that you feel would be useful to a marketing manager (e.g., if an ad triggered the consumerâs decision to purchase the product). Other areas to comment on would be level of involvement, etc.
| Consumer Decision Making Stage: | Considerations for Stage: | Common Ad Techniques: |
| Problem Recognition | What problems does this product solve for the consumer? ⢠What triggered the decision to purchase this product? ⢠Was this the first time the consumer purchased such a product? Define and discern the Actual and Desired States | Ask a question (Whatâs for dinner tonight?) Show before (actual state) and after (desired state) Use the word ânewâ or âintroducingâ to initiate curiosity. |
| Information Search | ⢠Did the consumer seek information about the product and about various brands? How was this information collected, and how much information was collected? ⢠Was the consumer searching for any advertisements for the product? What was the consumerâs reaction to these advertisements? | Match amount of information with type of product. Direct consumers to website, free kit or other information venues. Show role models that âlookâ like the target market. Show the entire line of product offerings (all the flavors and colors, etc.) Testimonials, etc. |
| Evaluation of Alternatives | ⢠How many alternatives were considered? How were they selected?⢠What features and characteristics of the product were most important to the consumer? Salient and Determinant defined attributes. | Featuring specific variables that the product is known for (ex. Volvo=Safety). This is known as âpositioningâ a product. Competitive method (brand compares themselves to âleading brand or categoryâ) Comparative method (brand compares themselves to another brand by name (Coke vs. Pepsi) |
| Product Choice | ⢠Did any other people play a role in the decision process? Describe theroles that each person played. | Tell consumers where and how the product is sold. Offer many ways to pay for the product. Divide payments. Offer sales promotion (coupons, rebates) |
| Post-Purchase Evaluation | ⢠How is the product used and consumed? How does the consumer feel when he or she uses the product? Does it merely Does the Ad encourage repeat purchase or loyalty to the brand- how? | Show awards the brand has won. Show how a brand should be consumed. Allow consumers many ways to return the product. Allow consumers to easily provide feedback. Reward consumers loyalty |
This assignment asks you to find one ad that addresses each of the needs of the five stages (in other words five different ads). This means that there must be five different ads for the total project, one for each stage (all ads are different from one another). Create a Power Point Presentation that shows how the advertiser is addressing the needs of the consumer for the specific Consumer Decision Making stage.
*Be aware that there is a helpful power point demonstration in a conference opened this week marked as "Advertising and the Consumer Decision Process (Ad Examples)". This is informative only and does not need to be commented on.
First, show the ad in a slide and then follow-up with a slide which explains (bullet form) why the ad slide targets the Consumer Decision Making process stage. ALL ADS MUST BE STILL ADS (NO VIDEOS or LINKS). Therefore the ad MUST be able to be copied and pasted within the power point slide (NO LINKS). Here is the format of the presentation:
Slide 1: Name, date
Slide 2: Problem Recognition Ad
Slide 3: Explanation why it addresses this stage
Slide 4: Information Search Ad
Slide 5: Explanation why it addresses this stage
Slide 6: Evaluation of Alternatives Ad
Slide 7: Explanation why it addresses this stage
Slide 8: Product Choice (Purchase) Ad
Slide 9: Explanation why it addresses this stage
Slide 10: Outcomes (Postpurchase) Ad
Slide 11: Explanation why it addresses this stage
Slide 12: Conclusion
In the conclusion of the slide presentation choose which ad is most effective (overall) and why.
Logistics Run Down:
-No more than 18 slides in length (includes cover page and bibliography)
-Include a cover page and bibliography of sources. Outside sources (esp. learning resources from weeks covered) are encouraged to be cited and used.
-Organize and utilize the headings given above.
-No more than 2 grammatical/spelling errors are allowed (please proof before submitting).
-Text is required to be in Times Roman, 12 pt font, double space the text.
- Keep voice in business third person. Do not include visuals in text analysis, if need to add create an appendix and refer your reader to such.