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MARKETING AND MEDIA APPLICATIONS 163

4.4 Marketing and Media Applications

Applications of linear programming in marketing are numerous. In this section we
discuss applications in media selection and marketing research.

Media Selection
Media selection applications of linear programming are designed to help marketing
managers allocate a fixed advertising budget to various advertising media. Potential
media include newspapers, magazines, radio, television, Internet, SMS text messag-
ing and direct mail. In these applications, the objective is to maximize reach,
frequency and quality of exposure. Restrictions on the allowable allocation usually
arise during consideration of company policy, contract requirements and media
availability. In the application that follows, we illustrate how a media selection
problem might be formulated and solved using a linear programming model.
The Lochside Development Corporation (LDC) is a joint public–private partner-
ship venture based in Scotland. LDC’s remit is to use private finance to fund housing
and leisure construction projects that will boost tourism and increase economic
growth and yet at the same time be environmentally friendly. One such project
underway is to construct a small new community alongside a small loch (a lake in
Scotland). Part of the development involves constructing homes, shops and leisure
facilities for permanent residents. A second part involves constructing holiday
homes and LDC is currently considering how best to market these. The primary
market for these homes includes middle- and upper-income families within approx-
imately 200 miles of the development. LDC have employed the advertising firm of
Boone, Phillips and Jackson (BP&J) to design the promotional campaign.
After considering possible advertising media and the market to be covered, BP&J
recommended that the first month’s advertising be restricted to five media. At the end
of the month, BP&J will then re-evaluate its strategy based on the month’s results.
BP&J collected data on the number of potential customers reached, the cost per
advertisement, the maximum number of times each medium is available and the
exposure quality rating for each of the five media. The quality rating is measured in
terms of an exposure quality unit, a measure of the relative value of one advertisement
in each of the media. This measure, based on BP&J’s experience in the advertising
business, takes into account factors such as audience demographics (age, income and
education of the audience reached), image presented and quality of the advertisement.
The information collected is presented in Table 4.12.
LDC provided BP&J with an advertising budget of £30000 for the first month’s
campaign.Inaddition,LDCimposedthefollowingrestrictionsonhowBP&Jmayallocate
these funds: at least ten television commercials must be used, at least 50000 potential
customers must be reached and no more than £18000 may be spent on television
advertisements. What advertising media selection plan should be recommended?
The decision to be made is how many times to use each medium. We begin by
defining the decision variables:

DTV ¼ number of times daytime TV is used
ETV ¼ number of times evening TV is used
DN ¼ number of times daily newspaper is used
SN ¼ number of times Sunday newspaper is used
R ¼ number of times radio is used

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