Managerial Report: Advertising budget allocation model

This report presents an advertising budget allocation model for Flamingo Grill restaurant. The report uses a mathematical linear program to recommend the optimal allocation of the budget across different media platforms. The report recommends the use of 15 TV adverts, 33 radio adverts, and 30 newspaper adverts to maximize the number of new customers reached out to with a maximum exposure. The report also includes a schedule of advertising and variables used. The subject is advertising and the course code is not mentioned. The college/university is not mentioned.

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Managerial Report: Advertising budget allocation model
Student Name
Course
Professor’s Name
School
The City and State where it is located
Date

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Managerial Report: Advertising budget allocation model
In the report, we used the Flamingo Grill restaurant, which is located in St. Petersburg,
Florida as a case study. The restaurant hired an advertising firm thus; the budget was one of the
key requirements that could help in facilitating an advertising campaign, which was expected to
be economical and sustainable by the restaurant (Camilleri, 2018, pp.85-103). To enable this, the
budget was to be within the constrained amount of $279000 that could be distributed across all
the media platforms available, which included the radio, newspaper, and over the television.
Such plans enable the restaurant management to plan according to the advertisement budget
(Chiu et al., 2018).
The restaurant management held meetings and came up with aims and objectives, which
could enable the restaurant to maximize the advertising exposure across all the three given media
platforms while reaching out to at least one hundred thousand new customers. Such plans, which
include timely meetings for planning and forecasting, are part of the key performances indices
for success in an organisation (Stamos et al., 2018, p.1). To achieve this aim, a mathematical
linear program was employed where the results were then computed using the Excel solver
(Singh et al., 2018, pp.504-514). The results from the program in excel were used to display the
required outcomes that were part of the recommendations the management meeting. They are
presented below.

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From the results presented in the excel solver, l would recommend the restaurant
advertising team to use 15 television adverts, 33 radio adverts, and 30 newspaper adverts. From
the data, it is clear that following the recommendation outlined, the restaurant will incur the
potential to maximize its advertising Exposure Rating.
The schedule of advertising
From the above recommendation, an advertising schedule, which will enable the firm to
stick within the budget of $279000, was drawn (Deng and Yiting, 2018, pp.99-118). The initial
exposure of the of adverting media, the rating of exposure per adverts, the number of customers
per advert, and the cost per advert are shown below versus the results after the initial exposure
ratings.
Initial Exposure
Advertising
Media
The rate of Exposure
per Ad
The number of
Customers
per Ad
Cost
per Ad in $
TV 90 4000 10000

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Radios 25 2000 3000
Newspapers 10 1000 1000
Results after the rating of initial exposure are shown below.
After Initial Exposure
Advertising
Media
Exposure
Rating per Ad
New Customers
per Ad
Cost
per Ad in $
TV 55 1500 10000
Radios 20 1200 3000
Newspapers 5 800 1000
It was depicted that there was a decrease in the exposure rating and the number of new customers
reached out to after 10 TV adverts, 15 radio adverts, and 20 newspaper adverts.
For the number of the new potential customers to be greater than 100000, the advertising budget
should be $279000 where the TV ads amount will cost not less than $140000, the amount for
radio ads to cost not more than 99000, while the amount for the newspaper ads to cost not less
than $30000.
Variables used
The total amount of the TV adverts having the rating of 90 was varied against 4000 new
customers (T1) while the number of TV adverts having 55 rating was varied against 1500 new
customers (T2). Another variable was the number of radio adverts, which had a rating of 25, was
varied against 2000 new customers (R1) while those with a rating of 20 were varied against 1200

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new customers marked as (R2). Finally, the amount of newspaper adverts having a rating of 10
were varied against 1000 customers marked as (N1) while the amount of newspapers having a
rating of 5 were varied against 800 new customers and were marked as (N2).
The objective function coefficients and constraints from the excel solver results are
presented in the tables below.
Maximu
m 10N1 + 5N2+25R1 + 20R2 + 90T1+55T2
s.t. NI < 20
R1 < 15
T1 < 10
1000N1 + 1000N2 +3000R1 + 3000R2 + 10000T1 + 10000T2 < 279000
1000N1 + 800N2 + 2000R1 + 1200R2 + 4000T1 + 1500T2 >
100,000
R1 + R2+ -2T1 + -2T2 >
0
T2 + T1 < 20
Summation of T2 and
T1 variables
10000T2 + 10000T1 > 140,000
3000R2 + 3000R1 <
99000
1000 N2 + 1000 N1>

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30000
N1, N2, R1, R2, T1, T2 >
0
Solution: Allocation of budget:
T2 = 5, T1= 10; 5+ 10 = 15 TV ads 10000*15 = $150000
R2 = 18, R1 = 15; 18 + 15 = 33 Radio ads 3000*33 = $99000
N2 = 10, N1 = 20; 10 + 20 = 30 Newspaper ads 1000*30 = $30000
When $10000 is added to budget: 10000 * (55/10000) = 55 points
Part 4 Exposure: (90*10) + (55*4) + (25*15) + (20*13) + (10*20) + (5*35) = 2130
From the analysis of the advertisement schedule, it is possible to attain the advertising
objective, which was to maximize the number of new customers reached out to while
maintaining the given budget. Therefore, for this to be possible, the number of television ads
should be maintained at 15, the number of radio ads to be maintained at 33, while the number of
newspaper ads to be incremented to 30 ads. Implementation of the recommendation of 15, 33,
and 30 television, radio, and newspaper respectively (Roose et al., 2018).
Ads Budget($

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Media )
Television 15 150000
Radio 33 99000
Newspape
r 30 30000
Total 78 279000
The total rate of exposure from the previous computation was 2160 while the total new
customers reached out to be 127,100, which is above the targeted number of customers by the
restaurant, which was 100,000 customers.
Comparing these recommendations, l would advocate for the later plan where the
restaurant is to adopt the use of 15 TV adverts, 33 radio adverts, and 30 newspaper adverts as
within this plan, it would enable in maximizing the number of new customers are reached out to
with a maximum exposure.

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References
Camilleri, M.A., 2018. Integrated Marketing Communications. In Travel Marketing, Tourism
Economics and the Airline Product (pp. 85-103). Springer, Cham.
Chiu, C.H., Choi, T.M., Dai, X., Shen, B. and Zheng, J.H., 2018. Optimal advertising budget
allocation in luxury fashion markets with social influences. Production and Operations
Management.
Deng, Y. and Mela, C.F., 2018. TV viewing and advertising targeting. Journal of Marketing
Research, 55(1), pp.99-118.
Roose, G., Geuens, M. and Vermeir, I., 2018. From informational towards transformational
advertising strategies? A content analysis of Belgian food magazine
advertisements. British Food Journal.
Singh, M., Pant, M., Kaul, A. and Jha, P.C., 2018. Advertisement Scheduling Models in T
elevision Media: A Review. In Soft Computing: Theories and Applications (pp. 505-514).
Springer, Singapore.

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Stamos, A., Bruyneel, S., De Rock, B., Cherchye, L. and Dewitte, S., 2018. A dual-process
model of decision-making: The symmetric effect of intuitive and cognitive judgments on
optimal budget allocation. Journal of Neuroscience, Psychology, and Economics, 11(1),
p.1.