Flamingo Grill

Only available on StudyMode
  • Download(s) : 1220
  • Published : April 6, 2011
Open Document
Text Preview
Case Problem 1 Planning An Advertising Campaign

The Flamingo Grill is an upscale restaurant located in St. Petersburg, Florida. To help plan an advertising campaign for the coming season, Flamingo's management team hired the ad­vertising firm of Haskell & Johnson (HJ). The management team requested HJ's recom­mendation concerning how the advertising budget should be distributed across television, radio, and newspaper advertisements. The budget has been set at $279,000.

In a meeting with Flamingo's management team, HJ consultants 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.

Advertising MediaExposure Rating / AdNew Customers / AdCost / Ad Television904000$10,000
Radio252000$ 3,000
Newspaper101000$ 1,000

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 television advertise­ment has the highest exposure effectiveness rating along with the greatest potential for reaching new customers.

At this point, the HJ consultants pointed out that the data concerning exposure and reach were only applicable to the first few ads in each media.

For television, HJ stated that the exposure rating of 90 and the 4000 new customers reached per ad were reliable for the first 10 television ads. After 10 ads, the benefit is expected to decline. For planning pur­poses, HJ recommended reducing the exposure rating to 55 and the estimate of the potential new customers reached to 1500 for any television ads beyond 10.

For radio ads, the preceding data are reliable up to a maximum of 15 ads. Beyond 15 ads, the exposure rating declines to 20 and number of new customers reached declines to 1200 per ad....
tracking img