Term Paper DST - The Marketing Department team requested...

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1 The Marketing Department team requested recommendation concerning how the advertising budget should be distributed across Billboards, Radio, and Newspaper advertisements. The budget has been set at 837,000 L.E. In a meeting with Marketing Department team, provided the following information about the industry exposure effectiveness rating per ad, their estimate of the number of potential new customers reached per ad, and the cost for each ad. Exposure Rating per Ad New Customers per Ad Cost per Ad Advertising Media Billboards 270 12,000 30,000 L.E. Radio 75 6,000 9,000 L.E. Newspaper 30 3,000 3,000 L.E. The exposure rating is viewed as a measure of the value of the ad to both existing customers and potential new customers. It is a function of such things as image, message recall, visual and audio appeal, and so on. As expected, the more expensive Billboards advertisement has the highest exposure effectiveness rating along with the greatest potential for reaching new customers. At this point, Marketing Department team pointed out that the data concerning exposure and reach were only applicable to the first few ads in each medium. For Billboards , Marketing Department team stated that the exposure rating of 270 and the 12,000 new customers reached per ad were reliable for the first 10 Billboards ads. After 10 ads, the benefit is expected to decline. For planning purposes, Marketing Department team recommended reducing the exposure rating to 165 and the estimate of the potential new customers reached to 4,500 for any Billboards ads beyond 30. For radio ads, the preceding data are reliable up to a maximum of 45 ads. Beyond 45
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