Awareness Index in MikesBikes

Question of the Week: What does the Awareness Index mean and how do you influence it?

MikesBikes' Market Summary Report

The Awareness Index is the performance of your Advertising and Branding decisions.

To increase it, you should invest in Branding, increase your total Advertising expenditure, and improve your Advertising mix.


Investing in promoting your firm’s brand will enhance the awareness of all your products. Brand advertising is a valuable complement to your individual product advertising – especially if you have several products.

About half of your brand awareness will carry over from the previous period. The curve below shows the increase in brand awareness (on top of what is carried over) achieved by various levels of expenditure.

branding graph

Advertising Mix

Your Advertising mix is how your Advertising budget is allocated across the three media channels (TV, Internet and Magazines). To improve this, you will need to identify which channels your customers view the most (see Market Information report).

Below are steps on how you can develop an effective Advertising Mix.

How to develop an Advertising Mix:

There are three substantial resources that you can use to determine your optimal advertising mix for a given advertising spend. One is through the Advertising and PR Reach by Media curve, the Product Dimension Sensitivities and lastly the Media Viewing Habits table. All of these can be found within the Market Information Report.

Each media type can reach a given proportion of its audience for a given investment. This is shown within the Advertising and PR Reach by Media graph below.

Advertising and PR Reach Curve

As an example, let’s say we are developing an Advertising Mix for the Adventurer segment with a budget of $2 million.

Step 1: Identify the segment’s sensitivities

If we look at the Market Information Report, we will see in the Product Dimension Sensitivities that the Adventurers segment has Medium sensitivity in Advertising.

What these sensitivities mean is that a change in any of these factors will result in a proportionate change in the consumers’ demand for the product.

Product Dimension sensitivity information in MikesBikes

Step 2: Identify the segment’s Media Viewing Habits

You will need to consider your consumers’ viewing habits by referring to the Media Viewing Habits chart (below) to help you allocate your budget on each channel.

Media Viewing Habits

The table shows us that 40% of the Adventurers market watch TV, 30% engage within the use of the Internet regularly, and 50% read magazines and is the most prevalent media channel. You then use this information with the reach curves to calculate the percentage of the market segment you’re actually reaching.

Step 3: It’s now time to allocate our Advertising Budget!

We know that we have $2 million to spend on Advertising this Adventurer product directly. We know that 50% of this segment view magazines and 40% watch TV, but 30% are on the internet regularly. Also, while Adventurers segment mostly read magazines; the internet has a higher reach so we will look into investing in Internet and Magazines.

Advertising and PR Reach Curve. Allocated spend on Internet

If we spend $1 million on Internet, we will reach around 44% of the Internet Viewers. 30% of the Adventurer segment can be reached via Internet advertising, meaning we could reach approximately 30% x 44% = 13.2% of the Adventurer segment.

If we spend $1 million on Magazines, we will reach around 22% of the Magazine readers. 50% of the Adventurer segment can be reached via Magazine advertising, meaning we could reach approximately 22% x 50% = 10% of the Adventurer segment.

Together, our $2 million budget (half spent on Internet and half on Magazine) would reach approximately 23% of the Adventurer segment.

This is only an example. This is far from the best mix you can make. We suggest playing around on different Marketing Mixes and see what works best for your strategy and budget.

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