5. You are the brand manager for Tropicana Orange Juice. You want to assess the

Question

5. You are the brand manager for Tropicana Orange Juice. You want to assess the impact of a 50% increase in advertising spending on sales. You ask your market research manager to set up a test for 12 months to measure the impact of the extra spending. The market research manager provides the following proposal: • This will be a 12 months test in Denver with 50 % extra in advertising spending above the regular national plan starting and the end of the first six months. • O1 X O2 where O1 is the Denver market sales for the first six months, O2 is the sales for the second six months, and X is the start for increased advertising at the end of the first six months. We will compare the first six months sales to the second six months sales. Do you accept this plan? If yes, why, if not, what alternative would you suggest?

Explanation / Answer

No, we should not accept this plan as the demand for Orange juice is seasonal in nature.

There may be more demand in the first 6 months while demand in the next 6 months will be historically and logically lower due to the weather etc.

It is advisable to do a plan in Denver wherein there is no extra advertising for 1 year and 50% increase in the next 1 year

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