Coursework Example on Advertising Budget

We decided to spend more on advertising, so we allocated $24M to advertising in period 0-1. We targeted all the demographic targets such as young singles, mature families, empty nesters and retirees except young families as they have children under age 10 and our product has alcohol which is not recommendable to these kids. We also targeted all the symptom targets namely cold, cough and allergy. As All-around was already a favorite brand with good awareness, we thought of having less of the original message and more of a reminder message. So, the ad message had 10% of primary content, 15% to promote benefits, and 36% of comparison with Best help.

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In period 1-2, we increased our advertising budget by $1.2M. We changed our demographic targets. We were targeting only young families, young singles and mature families for this period as satisfaction survey mentioned that these goals had a contribution of 62.6% in cold & cough markets

In period 2-3, we increased our advertising budget from $25.2 Million to $27 Million. We switched our ad agency to Sully and Rogers. We decided to go with mid quality company.

In period 3-4, we had to reduce our advertising budget of All-round to accommodate the remaining overall budget for test market studies, advertising & promotional budget of All-round products, so the current advertising budget of All-round is $15M.

In period 4-5, we realized per shopping habits survey, most of the customers were choosing independent drug stores, chain drug stores, and grocery stores for the purchase of Over-The-Counter Medicine. So we thought of allocating co-op advertising budget of $2.0M and Point-of-purchase budget of $2M to these channels

In period 7-8, we decreased advertising from 18 million to 16 million for the All-round + product.

For the alright product, we increased advertising budget only by 1 million since we saw that by increasing advertising for the All-right product by 3 million that it decreases the net income contribution for this product through the test market option.

Line extensions

We were asked to just make a cannibalization decision in period 3-4 which would allow us to launch a line extension of All-round brand in time 4. As the brand share of All-round in cough market was 28.9% which is more than the cold market that is 22.5%, we decided to come up with cough line extension. : In the previous period, we thought of going with a cough formula. But in this period, we changed our decision. We launched a 12-hour multi-capsule, for the All-round+

In period 4-5, we decided to update detailing materials to make our indirect sales force more efficient.

In period 5-6, we increased our trial budget for All-round from $0.4M to $0.6M, so as to stimulate purchases. We also increased our coupon budget from $1M to $2M with the same card value of 0.25 cents each. For the All-round+: We dropped promotional allowance of Independent stores from 18% to 16%, chain drug stores from 20% to 16%, grocery from 20% to 17%, mass merchandisers from 18% to 16% and wholesalers from 18% to 16%.

In period 6-7. We increased the promotional allowance of independent drug stores from 16% to 20%, chain drug stores from 16% to 20%, grocery stores from 17% to 20%, convenience stores from 15% to 17%, mass merchandisers from 16% to 17%, wholesalers from 16% to 17%. We decreased co-op advertising budget from $2.5M to $2M, POP budget from $4M to $2.5M for the. All-round+.

We also increased we increased promotional allowance of independent drug stores from 13% to 20%, chain drug stores from 16% to 20%, grocery stores from 16% to 20%, convenience stores from 13% to 16%, mass merchandisers from 13% to 16%, wholesalers from 10% to 16% for the All-right product.

The anticipated outcome in period 9.

Reduced sales due to increased price

Reduced awareness growth due to decreased trial size and advertisement