Advertising Management Ch. 7 NOT DONE.

Advertising Management Ch. 7 NOT DONE. - to less the...

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Sarah Anderson Advertising Management Written Assignment Ch. 7 David Smith Answer Question 4 in Exploring Advertising (Page 202) 4. Use the following methods to develop budget alternatives. Which approach would you recommend and why? a. Unit- of sale method. Last year, Dave spent 4 cents per donut on advertising, but he needs to adjust to 6% media inflation next year. Even increasing his prices by a few cents would make up for that in the long run, I'm sure. With alternative and cheap or free advertisements, he could easily do it b. Percentage-of-sales method. The industry typically spends 5% of donut sales on advertising. Dave should take a look at last years sales and anticipate sales for next year, or base a percentage of advertising on his sales, or a combination of both. He could incorporate some free advertising by handing out flyer he makes on his own, or by word of mouth. He could offer free samples in his store so new customers can try something out
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Unformatted text preview: to less the apprehension of buying something from him. c. Share-of-market/share-of-voice method. Patty is expected to spend $6,500 next year on advertising. Since Patty's business made more money than Dave's business, her budget allows her to spend a little extra on advertising without breaking the bank, however, since the forecast says his sales are expected to go up, he can and should increase how much he spends on his new advertising. d. Competitive parity. Since both businesses are very similar and specialize in pastries, Dave should create new and exciting products to entice customers to come to his store. Even if he added a little deli to offer something different than donuts, something such as soups, or cold sandwiches. Just anything to set him apart from Patty's Pastries. He could hang signs in his windows for free advertising of the new changes....
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