Research In Motion, Apple, and Palm sell several different products; most are profitable but some are not. Teams of employees in each company make advertising, investment, and product mix decisions. A certain portion of advertising for both companies is on a local basis to a target audience.
1. Find one major advertisement of a product or group of products for each company in your local newspaper. Contact the newspaper and ask the approximate cost of this ad space (for example, cost of one page or one half page of advertising).
2. Estimate how many products this advertisement must sell to justify its cost. Begin by taking the product’s sales price advertised for each company and assume a 20% contribution margin.
3. Prepare a one half page memorandum explaining the importance of effective advertising when making a product mix decision. Be prepared to present your ideas in class.