Downtown Motors Company (DMC), has hired a market services firm to develop an advertising strategy for promoting Downtown?s used car sales. The marketing firm has recommended...

Downtown Motors Company (DMC), has hired a market services firm to develop an advertising strategy
for promoting Downtown's used car sales. The marketing firm has recommended that
Downtown uses pot announcements on both television and radio as the advertising media for the
proposed promotional campaign. Advertising strategy guidelines are expressed as follows:
1. Use at least 30 announcements for combined television and radio coverage.
2. Do not use more than 25 radio announcements.
3. The number of radio announcements cannot be less than the number of television announcements. The
television station has quoted a cost of Sh.1,200 per spot announcement and the radio station has quoted a
cost of Sh.300 per spot announcement. Downtown‟s advertising budget has been set at
Sh.25,500. The marketing services firm has rated the various advertising media in terms of audience
coverage and recall power of the advertisement. For Downtown‟s media alternatives, the
television announcement is rated at 600 and the radio announcement is rated at 200.
Required:
Perform an analysis of advertising strategy for DMC. Include a consideration of the following items:
i) Determine the optimal number of television and radio spot announcements.
ii) Explain the relative merits of each advertising medium.
iii) Determine the rating that would be necessary in order to increase the number of television spots.
iv) Which restrictions placed on the advertising strategy would DMC want to consider relaxing or
altering? Why?
v) What is the use of any possible increase in the advertising budget?

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Mutiso answered the question on January 23, 2019 at 18:18

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