Advertising Experiments at Ohio Art Company

Group I Section C IIM Indore

Product Portfolio

Doodle Doug

Betty Spaghetty

Etch A Sketch

Immediate Concerns 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 merchandise managers?

Comparative Study of the Advertising Experiments

Factors Test City Control Cities Duration Time Period Mode of communication Shows Etch A Sketch Experiment Cincinnati Charleston, Cleveland, Indianapolis, Pittsburg (4) 3 weeks November 27 to December 16, 2006 TV commercials Morning and evening talk shows, daytime soaps, evening news program 3.7% of population in Cincinnati Adults and kids $30,150 $75,000 310 58% 36% Betty Spaghetty Experiment Phoenix, Arizona California (1) 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%

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

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 and Color Crazy.

Analysis of Advertising Experiment Data of Etch A Sketch

Analysis Description Inference

Alternative_1

Difference between Nov 2006 and Dec 2006 EAS sales in Cincinnati. EAS sales in Cincinnati during Dec 2006 versus corresponding sales in other 4 control cities. Comparing Dec 2006 sales to December 2005 EAS sales for Cincinnati Comparing EAS sales with that of Doodle Doug in Dec 2006 for Cincinnati Comparing Pre and Post Advertising sales data of Cincinnati with the control cities

Seasonality effect cant be isolated.

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

Alternative_2

Alternative_3 Alternative_4

Data Not Available Advertisement boosted the sales of EAS <with a caveat> Advertisement boosted the sales of EAS.

Alternative_5

Analysis of Advertising Experiment Data of Betty Spaghetty

Analysis Alternative 1
Description Inference

Comparing pre and post advertisement sales in Arizona

Sufficient data unavailable

Alternative 2

Comparing the sales per store per Growth due to advertisement week of test and control cities was observed. <with a caveat> UVA-M-0752X.xls

Required Data for Concrete Analysis

EAS

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 No. of Exposures (WE = GRP X Impact)

BS

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

Thank You!