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    Penang Golf Kit Ltd produces golf equipment and wants to promote a new youth-oriented product line. They have allocated $1 million to the promotional budget. Options presented include TV ads during sports broadcasts for $0.5 million plus $400,000 production cost, newspaper ads for $0.5 million reaching 2-4 million readers, or a golf magazine ad for $300,000 reaching 300,000 readers. The company needs to decide how to promote the new products while maintaining their brand image.

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    Penang Golf Kit Ltd produces golf equipment and wants to promote a new youth-oriented product line. They have allocated $1 million to the promotional budget. Options presented include TV ads during sports broadcasts for $0.5 million plus $400,000 production cost, newspaper ads for $0.5 million reaching 2-4 million readers, or a golf magazine ad for $300,000 reaching 300,000 readers. The company needs to decide how to promote the new products while maintaining their brand image.

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    67 views2 pages

    Promo Case 2 PDF

    Uploaded by

    Priyanka Shah
    Penang Golf Kit Ltd produces golf equipment and wants to promote a new youth-oriented product line. They have allocated $1 million to the promotional budget. Options presented include TV ads during sports broadcasts for $0.5 million plus $400,000 production cost, newspaper ads for $0.5 million reaching 2-4 million readers, or a golf magazine ad for $300,000 reaching 300,000 readers. The company needs to decide how to promote the new products while maintaining their brand image.

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    of 2

    IB Business Management – Marketing

    4.5H: The 4Ps - Promotion: Activity

    IB Business Management: www.BusinessManagementIB.com

    4.5 THE 4P S - PROMOTION: ACTIVITY H

    Read the case study information below and answer the questions that follow.

    PROMOTING GOLF EQUIPMENT

    Penang Golf Kit Ltd produces


    golfing equipment. The
    product range includes clubs,
    bags, golfing shoes and other
    clothing. Sales have grown
    steadily in recent years, but
    no more rapidly than the
    overall market expansion of
    golf and golfing equipment.
    The firm’s products are well
    known for their quality and
    relatively high prices.
    Promotion is based around
    sponsorship of one major
    championship each year and
    three famous golfers. This
    helps provide some public
    relations exposure when golf is being televised.
    A limited amount of advertising is paid for in the country’s best-known golfing magazine. The
    firm has recently started designing a new range of golfing equipment and clothing aimed at
    the youth market (less than 21 years). The number of young people playing golf has increased
    by 50 per cent over the last ten years compared to an overall growth of twenty per cent in
    the total number of players. The business has yet to decide how the new range of goods
    should be promoted. A total marketing budget of $1 million has been allocated for this
    purpose. The aim is not to lower the image of the brand name with these new products. The
    IB Business Management – Marketing
    4.5H: The 4Ps - Promotion: Activity

    following data have been gathered – use them to advise the firm on an appropriate
    promotional strategy.
    TV advertising - $0.5 million is the minimum promotion budget required for buying TV time. This
    purchases five minutes of TV time in 10-30 second slots. Two times are suggested:
     During the interval of the Saturday evening football match on TV. The audience is forecast
    to be 5 million, of which 25 per cent are likely to be under 21. The average income of
    viewers is around $40,000 per year.
     Friday evenings after a popular sports quiz show. Audience figures suggest an average of
    6 million viewers, 25 per cent of which will be under 21. The average income of viewers is
    around $30,000.
    The cost of producing the advertisement for TV will be a further $400,000.
    National newspaper advertising - One popular paper will offer ten full-page adverts for $0.5
    million. This paper has a circulation of 2 million and, on average, three people read each
    edition. Another paper, a quality daily usually bought by high-income groups, offers six pages
    for the same price. The readership is 1 million but four people on average read this paper. The
    cost of producing a newspaper advert will be $20,000, but a colour magazine advert will cost
    $50,000.
    A monthly golfing magazine - Aimed at all ages it will offer one full page in the next ten
    additions for $300,000. Circulation is only 30,000 but an estimated ten people read each
    edition.
    Other options include radio advertising and street posters.
    Source: www.BusinessManagementIB.com

    QUESTIONS: 25 MARKS, 40 MINUTES

    1. Define: i. Above-the-line promotion


    ii. Below-the-line promotion [2 marks]

    2. Explain two ways in which the company could have decided on the size of the total
    marketing budget of $1 million. [5 marks]

    3. Using all of the data, prepare a cost-benefit analysis of the promotional choices.
    [4 marks]

    4. Explain two other pieces of information you would like to review that would help you in
    coming to a recommendation regarding the promotional mix for Penang Golf Kit Ltd.
    [6 marks]

    5. Evaluate the decision of Penang Golf Kit Ltd to pursue a promotional strategy based almost
    exclusively on one of the TV advertising options outlined in the case study. [8 marks]

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