Chapter 7, Problem 16QP

GreenLawns provides a lawn fertilizer and weed control service. The company is adding a special aeration treatment as a low-cost extra service option, which it hopes will help attract new customers. Management is planning to promote this new service in two media: radio and direct-mail advertising. A media budget of $2,500 is available for this promotional campaign. Based on past experience in promoting its other services, GreenLawns obtained the following estimate of the relationship between sales and the amount spent on promotion in these two media. S = −2R2 − 10M2 − 8RM + 18R + 34M where S = total sales in thousands of dollars R = thousands of dollars spent on radio advertising M = thousands of dollars spent on direct-mail advertising. GreenLawns would like to develop a promotional strategy that will lead to maximum sales subject to the restriction provided by the media budget. (a) What is the value of sales (in dollars) if $1,500 is spent on radio advertising and $1,000 is…

The market research team at AdRight is assigned the task The market research team at AdRight is assigned the task to identify the profile of the typical customer for each tread-mill product offered by CardioGood Fitness. 1. Create a customer profile for each CardioGood Fitness treadmill product line by developing appropriate tables and charts. 2. Write a report to be presented to the management of Car-dioGood Fitness detailing your findings. The market research team at AdRight is assigned the task

Football Association of Zambia (FAZ) has developed a new sports drink and is planning to launch it at the soon coming Charity Shield tournament. FAZ’s advertising agency can purchase one, two or three 30 second commercials advertising the drink and estimates that the return will be based on the viewership per game. Viewership, in turn, is based on fans’ perception of whether the game is “dull”, “average”, “above average”, or “exciting”. The advertising agency has constructed the following payoff table, giving its estimate of the expected profit resulting from purchasing one, two, or three advertising slots. (Another possible decision, of course, is for FAZ not to advertise at all during the games). No. of Ads Perceived Game Excitement Dull Average Above Average Exciting One -2 4 9 18 Two -5 7 14 23 Three -9 6 15 27 Required: Identify the decision alternatives and uncertain conditions surrounding them? What is the optimal decision…