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The ten advertising expenditures, day-after recall scores (DAR) and average frequency (AF) options were introduced in the Java applet for analysis. All short-term criteria and long term projected statements were compared and analyzed to find the best advertising expenditures.
The same amount of advertising expenditures for year one was assumed for years two and three.
Please click here to access the multiple-criteria model.
The following table shows a summary of all criteria considered in the decision making process for each option. The last two columns show the long-term criteria considered in the analysis while the others refer to the short-term criteria. The options were sorted decreasingly by the brand awareness index.
| Option |
Budget
($ in million) |
DAR |
AF |
BA |
IP |
RR |
MS |
Net Profit:
Yr 1($) |
NPV ($) |
| 1 |
16.64 |
38.6 |
11.2 |
51.78 |
32.74 |
18.10 |
21.18 |
20,466,067.73 |
56,875,406.47 |
| 2 |
12.02 |
42.3 |
9.6 |
50.92 |
32.48 |
18.06 |
21.14 |
20,387,436.04 |
56,653,662.34 |
| 3 |
12.78 |
34.6 |
9.9 |
47.45 |
31.41 |
17.94 |
20.98 |
20,060,745.84 |
55,732,385.38 |
| 4 |
13.84 |
28.9 |
10.2 |
42.96 |
30.00 |
17.76 |
20.76 |
19,624,296.61 |
54,501,584.39 |
| 5 |
18.71 |
15.3 |
13.4 |
29.59 |
25.79 |
17.23 |
20.09 |
18,242,919.13 |
50,606,055.18 |
| 6 |
17.04 |
15.2 |
12.2 |
26.16 |
24.71 |
17.09 |
19.91 |
17,874,709.55 |
49,567,692.11 |
| 7 |
10.34 |
18.9 |
3.2 |
8.44 |
19.35 |
16.38 |
18.96 |
15,941,814.91 |
44,116,866.05 |
| 8 |
5.89 |
9.4 |
5.3 |
7.50 |
19.08 |
16.34 |
18.91 |
15,839,957.49 |
43,829,624.63 |
| 9 |
4.67 |
10.1 |
4.3 |
6.98 |
19.93 |
16.32 |
18.88 |
15,783,684.81 |
43,670,933.77 |
| 10 |
2.31 |
7.2 |
2.0 |
4.99 |
18.37 |
16.25 |
18.78 |
15,569,198.31 |
43,066,074.76 |
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From the above analysis, the highest short-term and long-term results is the first Option 1, $16.64-million advertising budget. It yeilds 51.78% brand awareness, 32.74% of initial purchase, 18.10% of repeat purchase rate, and $21.28 of market share. Also this option yields the higest net profit an dnet present value for the first threen years marketing.
| Projected Short-Term Results for Solo |
| Brand Awareness |
51.78% |
|
|
| Initial Purchase Rate |
32.74% |
|
|
| Repeat Purchase Rate |
18.10% |
|
|
| Market Share |
21.18% |
|
|
| Projected Long-Term Financial Statement |
| |
2008 |
2009 |
2010 |
| Sales |
$85,904,694.12 |
$90,199,928.83 |
$94,709,925.27 |
| c.g.s. |
$41,313,176.22 |
$43,378,835.03 |
$45,547,776.78 |
| Gross Margin |
$44,591,517.90 |
$46,821,093.80 |
$49,162,148.49 |
| Admin / Other MKTG |
$22,731,000.00 |
$23,412,930.00 |
$24,115,317.90 |
| Depreciation |
$1,394,433.53 |
$1,394,433.53 |
$1,394,433.53 |
| Advertising |
$16,640,000.00 |
$16,640,000.00 |
$16,640,000.00 |
| Net Profit |
$20,466,067.73 |
$22,013,713.63 |
$23,652,380.42 |
| Present Value |
$61,058,707.05 |
|
|
| Net Present Value |
$56,875,406.47 |
|
|
| Net Profit 3 Years Cume |
$66,132,161.78 |
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