Luna Pizza is a regional producer of frozen pizza. Its only major competitor is Brutus Bros. The
Question:
Luna Pizza is a regional producer of frozen pizza. Its only major competitor is Brutus Bros. The following is a brief excerpt from Luna’s situation analysis for the next fiscal year. Estimate the next year’s advertising budgets for Luna under each of the following circumstances:
a. Luna follows a historical method by spending 40 cents per unit sold in advertising, with a 5 percent increase for inflation.
b. Luna follows a fixed percentage of projected sales method, using 7 percent.
c. Luna follows a share-of-voice method. Brutus, the primary competitive pizza brand, is expected to use 6 percent of sales for its advertising budget in the next year.
Actual Last Year Estimated Next Year Units sold 120,000 185,000
$ sales 420,000 580,000 Brutus $ sales 630,000 830,000.
AppendixLO1
Step by Step Answer:
Advertising And IMC Principles And Practice
ISBN: 9780135836064,9780135836125
11th Edition
Authors: Sandra Moriarty , Nancy Mitchell , Charles Wood , William D. Wells