Skim Pricing and

Advertising Analytics
BITS Pilani
(Lecture 6)
Pilani|Dubai|Goa|Hyderabad By Gaurav Nagpal

1
Skim Pricing

A certain product is being launched, for which the cost of

production is 40 $ per unit. There are 120 customers
willing to pay different price for the product which is
known to you. You have 120 units available with you and
would like to price the product over a period of 10
months so as to do price skimming, and maximize the
profits.

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Skim Pricing

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Advertising Problem 2

A small retailer wishes to reach two types of audiences- customers with annual income
greater than twenty lakhs INR (target audience A), and customers with annual income
of less than twenty lakh INR (target audience B). Total advertising budget is Rs. 2 laks
INR. One program of TV advertising costs Rs. 50k, and that of radio advertising costs
Rs. 20k. Atmost 3 programs need to be run on TV, and radio programs should be
limited to 8. The table below shows the number of customers reached through each
program for each customer segment type. Determine the media mix to maximize the
total reach.

Radio Program Television Program

Target segment A 20,000 4,50,000
Target Segment B 80,000 50,000

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Advertising Problem 2

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Advertising Problem 2

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Advertising Problem 2

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Advertising Problem 3

A retail chain wishes to get atleast 160 million audience exposures. Because of the nature
of the product, the company wants atleast 60 million of audience exposures to the people
with monthly income of more than Rs. 10k; and atleast 80 million of exposures to involve
persons between 18 and 40 years of age. There are two advertising media under
consideration: magazine and TV. Find the optimal media plan for minimum expenditure.
In the above problem, how would the objective be impacted with the change in the right
hand side of the constraints?
Magazine Television
Cost per ad (Rs. ‘000) 40 200
Audience per ad (Mn) 4 40
Audience per ad with monthly income of over Rs. 10000 Mn 3 10
Audience per ad in age group of 18 to 40 (Mn) 8 10

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Advertising Problem 3

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956