MULTIBLE CRITERIA BUDGETING MODEL

SOLONEX INC.

Strategic Communication Models by Burcu Arikan, 2008

Introduction

The present project details the development of a multiple criteria advertising budgeting model for Solonex, Inc., a laundry detergent manufacturer that plans to launch a new liquid detergent (Solo) that is going to compete in the lower consumer price market.

Kemper Corporation, Solonex's parent company, requires both short term and long term projections of the profitability of any new product. The Solo brand manager decides to build a short-term product introduction model similar to that used by the N.W. Ayer agency; to achieve this objective, she decides to work in conjuction with KTL, an Advertising Agency, since this firm has the data needed to develop the model in reference.

For the long-term planning, the brand manager intends to project profits based on unit sales forecastings over the three years and, thus, calculate the Net Present Value of the proposed introductory plan for the indicated horizon. The brand manager also plans to join the short-term model and long-term model calculations into a single model to be installed as a Java applet. This joint model and the information provided by the case should assist the Solo brand manager to determine the most appropriate advertising expenditure, among the alternatives available, which she is to recommend to Kemper top management.

The stages of this model-building process are develped in the corresponding linked pages of this website.