A candy manufacturer estimates the product's new advertising campaign will reach 1,750,000 people and will cost $400,000 if the company uses radio and newspaper, and $6.5 million if it uses television. What does the company's decision seem to rest on?

Question

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The decision seems to rest on the cost per contact, as the company needs to evaluate whether the cost of reaching each potential customer is reasonable and worth the investment. The difference between the cost of advertising through radio and newspaper ($400,000) and television ($6.5 million) is significant, so the company needs to determine if the larger reach of television justifies the greater expense.

A Candy Manufacturer Estimates the Product's New Advertising Campaign Will