Customer Response and Value
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Question 1: Marketing Communications and Customer Response (Use Figure Below)
a. Using the data provided, how do the results of this marketing communication change when advertising exposure is only 50 percent?
b. Using the results provided, evaluate the impact of improving ad awareness from 54 to 68 percent. What are your findings?
c. For future advertisements, would it be more effective to work on increasing comprehension by 5 points (from 77% to 82%) or to work on improving intentions to purchase by 5 points (from 68% to 73%)?
Question 2: Customer Value Analysis (Use Figures Below)
a. Using the data provided, how does the advertising elasticity change when the increase in sales after advertising is 10 percent instead of 4 percent??
b. What would be the profit impact if the advertising budget were increased as proposed but sales do not change?
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The expert examines customer response and values.
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Please find the response for the questions in the attached file.
Running head: MARKETING COMMUNICATIONS
Marketing communication and Customer Response
Answer 1 (a)
If Advertising exposure is 50%
Customer response index (CRI) will change in following way-
CRI for customers who are not exposed for the advertising is 50%.
CRI for customers who are exposed but no awareness is
.50* .46 = .23 or 23%
CRI for customers who are exposed and aware but do not comprehend
.50 * .54 * .23 = .0621 or 6%
CRI for customers who are exposed, aware, comprehend but no intentions
.50 * .54 * .77 * .32 = .0665 or 7%
CRI for customers who are exposed, aware, comprehend, intention and no action
.50 * .54 * .77 * .68 * .1 = .014 or 1%
CRI for customers who are exposed, aware, comprehend, intention and action oriented
.50 * .54*.77*.68 * .90 = .1272 or 13%
Thus CRI will be changed to 13%, 1%, 7%, 6%, 23%, and 50% from 16%, 2%, 8%, 8%, 29%, and 37%. It shows an increase in the advertising exposure will decline the customer response index for all the categories except the customers who are not exposed.
(b)
If advertising exposure awareness is change from 54% to 68%
CRI for customers who are no exposed for the advertising is 37%.
CRI for customers who are exposed but no awareness is
.63* .32 = .20 or 20%
CRI for ...
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