At the moment, Blue Inc. is facing the problem of the development of the effective promotional campaign but the company needs to forecast accurately the further development of the market and its business. In actuality, the company needs to outpace its rivals and the advertising campaign should accelerate the business development of Blue Inc. I have been informed recently by my colleague that you are planning to launch a large scale advertising campaign and I suggest you considering my forecasts concerning the advertising budget and outcomes of the advertising campaign.
First of all, I used sales as independent variable in my calculations.
I believe this is the most reliable independent variable because Blue Inc. can forecast its sales accurately because sales are stable and they keep growing steadily. On the ground of my analysis, I found out that the advertising campaign can be successful, if the company stresses the advantage of its product and maintains the positive image of its brad. Customers will buy the product because of its brand. In such a situation, the company can count for the extension of its market share from the current 6% to 8% in a year and 10-12% in three years. At the same time, the company will need to invest substantial funds in the promotion. In this regard, the company should rise its spending on advertising to 5% of its budget. Even though the costs are high but I believe the returns will outweigh the costs.
I hope my forecast and recommendations would be helpful for you.