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Issues of the case

HiTech Engineering is a thriving company in the field of manufacturing industrial

products. Because of this, the company have no access to the traditional forms of media or

marketing tools that are available for consumer products and service based firms like television,

radio, or internet broadcast. While they may institute the same, it is not practicable because the

company only targets other businesses or contractors requiring the use of their industrial

products. The company can only rely on the word of the mouth advertising and printed media to

be distributed directly to their prospective clients. These printed media include magazines,

postcards, editorials, news release, and literature. It poses a problem on the research and

development aspect of the firms marketing operation since it yields minimal results and it is

unable to provide any data that would lead them to identify the most efficient and cost-efficient

method of advertising.

Variables

As stated above, the data available for the company is minimal. However, the

identification or determination of the leads, which corresponds the number of individuals

reached by each forms of advertising are present. The variables available in this research is the

date or the month the data was gathered, the number of leads that each of the media forms yield,

and the amount spent. The dependent variables in this paper are those which are not constant and

are affected by the independent variables. These are, the number of leads and the amount spent.

Meanwhile, the independent variables are the types of media forms.

It is expected that the independent variables will affect significantly the dependent

variables. One particular hypothesis is that, the amount spent for the publication of printed media
is much more expensive when it comes to magazines since that kind of advertisements are very

expensive to put up. Meanwhile, it is hypothesized that news releases yield most of the leads that

informed the consumers of the presence of the company. Generally, the dependent variables

(Amount Spent and Leads) differ from each of the independent variables because of the fact that

its publication costs are different as well as its reach and impact. In this regard, it is perceived

that the dependent and independent variables are positively correlated.

Best approach

Based on the data available showing the amount and the yields for each of the

independent variables, it is perceived that the most appropriate method to determine the most

efficient method to resolve this problem is data mining and statistical inferences. Both of these

methods are popular techniques used to identify the correlations between the different data sets

available. However, the data available is not very large to be used for identification using data

mining. Hence, simple statistical inferences would be most appropriate.

Statistical Model

The most appropriate model to analyse and interpret the case is to utilize the

multiple regression analysis. This is a statistical analysis which determines a Y variable from

more than one predictors. This is a direct generalization of the simple regression which assumes

that each independent variable has a linear relationship with the dependent variable. The formula

for multiple regression analysis is:

Y = 0 + 1 X1 + 2 X2 + 3 X3 + + k Xk + E

Whereas:

k = the number of independent/predictor variables used

0 is the intercept
E is the error (or random) term

i is the slope of the regression surface with respect to Xi

= is also the incremental change in Y as Xi increases by 1 unit

Meanwhile, descriptive statistics such as mean and frequency count would be helpful in

determining the efficiency of each forms of advertising when it comes to cost and the leads that it

yield for the organization. The results are as follows:

Forms of Media Total Leads


Magazine 1265
Postcard 7581
Editorial 782
News Release 1609
Literature 1509
Table 1: Total leads yielded by each forms of advertising media

Forms of Media Total Amount Spent


Magazine $64491
Postcard 88614
Editorial 34132
News Release 3404
Literature 6824
Table 2: Total amount spent for each forms of advertising media

Forms of Media Amount Spent Per Leads


Magazine $61.89
Postcard 9.21
Editorial 77.11
News Release 2.69
Literature 18.68
Table 3: Average spending per leads yielded by each forms of media.

It may be inferred from the above tables that Postcards yield most of the leads that

eventually result to purchase on the HEI company. Accordingly, it is also the most expensive one

because of the fact that it required approximately $88,614 to be produced. However, efficiency

wise, this is the cheapest and most effective form of advertising since it averages only $9.21.

Meanwhile, the least efficient would be magazine advertisement.


Factors to Leads

The factors which affect the leads most is the accessibility of the forms of the media. It

may be inferred from the tables above as well as the result of the multiple regression analysis

that postcards are the most efficient form of advertising that the company shall resort to. First,

the size and the design of the advertising materials motivate the prospective customers to

purchase because of the familiarity and the attention. In addition, an enhanced design may

signify the capability of the company to manufacture high quality considering how the quality of

the products are perceived by the consumers. Moreover, unlike in magazines, these postcards are

sent directly to the individuals who have or who may have interest on the products of the

company. In this way, the advertising efforts will not go to waste and it will directly send the

message to the prospective clients without distractions found in magazines and press releases.

Postcards are direct to the point invitation for the prospective clients and no one else.

Recommendation

It is highly recommended that the HEI management continue distributing advertising

materials through press releases, editorials, literatures, and magazine. However, to save costs, the

company should cut down on using these forms and instead focus on utilizing postcards as a

major form of advertising. This is due to the fact that the only prospective clients, who actually

have the need for the industrial products, will receive these postcards. It will minimize any

wastage on printing advertisements through magazines that the general public, who does not

have interest on the company products, will have access to. In addition, the company should

continue utilizing statistical inferences particularly the basic descriptive statistics and multiple

regression analysis to determine the significant information among the multiple independent and

dependent variables.