Advertising Experiments at Ohio Art Company

 Advertising Experiments at Ohio  Art Company Group I Section C IIM Indore

Product Portfolio

Doodle Doug

Etch A Sketch

Betty Spaghetty

Immediate Concerns  –  Ohio  Ohio Art Company •

•

Is it justified to allocate a $ 2 million budget of national advertising campaigns for Etch A sketch and Betty Spaghetty? How will Ohio Art company justify the shelf space allotted to Betty Spaghetty to the the merchandise merchandise managers?

Comparative Study of the Advertising Experiments Factors

Etch A Sketch Experiment

Betty Spaghetty Experiment

Test City

Cincinnati Charleston, Cleveland, Indianapolis, Pittsburg (4) 3 weeks November 27 27 to December December 16, 2006 TV commercials Morning and evening talk shows, daytime soaps, evening news program

Phoenix, Arizona California (1)

Control Cities Duration Time Period Mode of communication Shows

Reach of each commercial Target Audience Media Spend Cost of Developing ads GRP Average gross margin Average Retail Margin

3.7% of population in Cincinnati Adults and kids $30,150 $75,000 310 58% 36%

4 weeks June 17 to July 14, 2007 TV and Radio Commercials Cable channels like Nickelodeon and Cartoon Network; radio commercials on morning & evening commutes 1.8% of population in Phoenix Girls aged 2 -11 years $39,522 $150,000 664 56% 36%

Given Experimental Data Experiments

Etch A Sketch

Given Data

•

Weekly Sales of Classic EAS and Doodle Doug in Cincinnati and the four control cities from December 3, 2005, to March 2, 2007. EAS – Ohio Art Media Plan from UVA-M-0752X •

Betty Spaghetty

•

•

Weekly Sales of Betty Spaghetty in Arizona (test – city) and California (control  – city) from June 17, 2007, to July 14, 2007. Total Sales Value for BS SKUs – Go Go Glam Gl am and Color Crazy.

Analysis of Advertising Experiment Data of Etch A Sketch Analysis

 Alternative_1

Description

Difference between Nov 2006 and Dec 2006 EAS sales in Cincinnati.

Inference

Seasonality effect can’t be

isolated.

 Alternative_2

EAS sales in Cincinnati during Dec 2006 versus corresponding sales in other 4 control cities.

Disruptive Growth Trends observed. Hence no concrete conclusion can be derived from the analysis.

 Alternative_3

Comparing Dec 2006 sales to December 2005 EAS sales for Cincinnati

Data Not Available

 Alternative_4

Comparing EAS sales with that of Doodle Doug in Dec 2006 for Cincinnati

 Advertisement boosted the sales of EAS

Comparing Pre and Post Advertising sales data of Cincinnati with the control cities

 Advertisement boosted the sales of EAS.

 Alternative_5

Analysis of Advertising Experiment Experiment Data of Betty Spaghetty Analysis

Description

Inference

Alternative 1

Comparing pre and post advertisement advertisement sales in Arizona

Sufficient data unavailable

Alternative 2

Comparing the sales per store per week of test and control cities UVA-M-0752X.xls

Growth due to advertisement was observed.

Required Data for Concrete Analysis

EAS

BS

• • • • •

2005 Sales Data of all cities SKU wise sales data External factors influencing sales in all the cities  Annual industry growth  Average Impact to calculate Weighted Weighted No. of Exposures (WE = GRP X Impact)

• Yearly Sales of 2006 and 2007 • External Factors influencing sales in all cities •  Annual industry growth •  Average Impact Impact to calculate calculate Weighted Weighted No. of of Exposures (WE = GRP X

Impact)

Thank You!