Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California is carried in only 10 percent of stores. So, Kayla has set an objective of being in 25% of all retail computer stores in California within one year.
SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. So, the advertising objective is for 40% of SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80% within the next month.
SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40% market share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a game player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!"
In order to achieve its objective at a retailer called Computer Superstore, SGCA intends to repay the retailer for a share of what it spends to advertise SGCA's computers in local media. This is

Question

Quizplus · Accepted Answer

The strategy of repaying a retailer for a share of their advertising costs is called cooperative advertising. This is a common practice in the retail industry and can help build stronger relationships between manufacturers and retailers, as well as increase brand awareness and sales for both parties. It is not likely to increase the income of SGCA's ad agency or be a bad idea because retail stores can negotiate lower rates in local media through bulk buying.

Kayla Jurgenson, Marketing Manager for Super Gaming Computers and Accessories