The Chamber of Commerce periodically sponsors public service seminars and programs. Currently, promotional plans are under way for this year's program. Advertising alternatives include television, radio, and online. Audience estimates, costs, and maximum media usage limitations are as shown:
| Constraint | Television | Radio | Online |
| Audience per advertisement | 150,000 | 17,000 | 35,000 |
| Cost per advertisement | $1,500 | $250 | $500 |
| Maximum media usage | 12 | 18 | 11 |
To ensure a balanced use of advertising media, radio advertisements must not exceed 45% of the total number of advertisements authorized. In addition, television should account for at least 10% of the total number of advertisements authorized.
| (a) | If the promotional budget is limited to $24,000, how many commercial messages should be run on each medium to maximize total audience contact? | ||||||||
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| What is the allocation of the budget among the three media? | |||||||||
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| What is the total audience reached? | |||||||||
| (b) | By how much would audience contact increase if an extra $100 were allocated to the promotional budget? | ||||||||
| Increase in audience coverage of approximately |
Ans A)
| Advertisement Alternatives | No of commercial messages | Budget ($) |
| Television | 12 | 18000 |
| Radio | 2 | 500 |
| Online | 11 | 5500 |
| 24000 |
Total Audience Reached = 12*150000 + 11*35000 + 2*17000 = 2,219,000
Ans b) If promotional budget is increased by $100 then we can't advertise through any medium.
Since we can'r afford anymore telivision and online medium one has to go wtih radio only and this will increase audience by 6800 for every $100 spend.
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