This document discusses applying linear programming (LP) in marketing. It provides an example of using LP to solve a marketing problem of maximizing audience for a new product launch by allocating an advertising budget across TV spots of different times of day. The problem is formulated as an LP model with decision variables for the number of ads in each time slot, the objective to maximize total audience, and constraints on budget, minimum ads per type, and total ads per day.

1. Application of LPP in
Marketing.
Presented by,
Leni Thomas.

2. Marketing
 Marketing is a social and managerial process by
which individual and groups obtain what they
need and what through creating, offering and
exchanging products of value with others.

3. Linear Programming
• Linear programming (LP) is a central topic
in optimization.
• LP has attracted most of its attention in
optimization during the last six decades for
two main reasons:
* Applicability,
* Solvability.

4. Application of LPP
• Marketing Applications,
• Financial Applications,
• Operations Management Applications,
• Manufacturing Problems,
• Inspection Problems,
• Data Envelopment Analysis..etc.

5. Basic Components of an
LP:
Each optimization problem consists of three elements:
Decision variables: describe our choices that
are under our control;
Objective function: describes a criterion that we
wish to minimize (e.g., cost) or maximize (e.g., profit);
Constraints: describe the limitations that
restrict our choices for decision variables.

6. General form of LPP
• Define objective.(Zmax or Zmin)
• Identify decision variable (x1, x2………xn ).
• Determine objective function,
Z = c1x1 + c2x2 +………….+cnxn
• Subject to constrain
a11x1 + a12x2 + …..........+a1nxn (≤ or ≥) b1
a21x1 + a22x2 + ………..+a2nxn (≤ or ≥) b2
.
.
am1x1 + am2x2 + ……….+amnxn (≤ or ≥) bm
• Non negative Constrain
x1 ≥ 0, x2 ≥ 0,…, xn ≥ 0

7. LPP in marketing..
• Media selection,
• Maximize customer satisfaction,
• Minimize product error,
• Brand name, etc.

8. Sample marketing Problem.
ABC Company recently developed a new
instant salad machine, it has $282,000 to
spend on advertising. The money is to be
spent on a TV advertising blitz during one
week in November.
The three options available are daytime
advertising, evening advertising, and night-
time advertising.

9. Estimated Audience
Ad Type Reached With
Each Ad
Cost Per Ad
Daytime 3,000 $5,000
Evening News 4,000 $7,000
Night time 75,000 $1,00,000

10. ABC wants to take out at least one ad of each type
(daytime, evening, and night-time). Further, there are
ten daytime spots and six evening news spots available
daily. ABC wants to have at least 5 ads per day.
Formulate this problem as a linear programming
problem given that the objective is to maximize
audience.

11. Solution
• Define objective:
To Maximize audience
• Identify decision variable.
Let p=no of day time ads.
Let q=no of day time ads.
Let r=no of day time ads.
• Determine objective function.
Zmax=3000p+4000q+75000r.

12. STC
• Cost constrain.
5000p+7000q+100000r≤ 282000
• One ad of each time
p≥1
q≥1
r≥1
• Spot constrain:
p≤10
p≤6
• Requirement constrain
p+q+r ≥5

13. NNR
• p,q,r≥ 0.

14. Thank You...