Kyle is a journalist and marketer that has taught writing to a number of different children and adults after graduating from college with a degree in Journalism. He has a passion for not just the written word, but for finding the universal truths of the world.
Linear Programming for Marketing
Even though linear programming techniques have not reached the level of acceptance and recognition they deserve, linear programming is a useful tool when it comes to marketing applications. From media selection to market research, linear programming has many benefits as a tried and tested problem-solving method that can enhance the decision-making process. This technique is especially useful when there are constraints or restrictions when it comes to making a decision in certain applications of marketing.
What is Linear Programming?
Linear programming is a way to allocate scarce resources using a mathematical technique. The technique is often used to optimize the value of an objective, such as minimizing costs or maximizing profits while dealing with any constraints. In plain English, this means the technique is designed to help marketers or managers to plan and make better decisions regarding resource allocation. In fact, linear programs allow marketers to make the best use of limited resources, from money to manpower, materials to time, or skills to facilities, just to mention a few resources.
Marketers must take the given problem and turn it into a linear programming model, using the appropriate variables and the standard techniques to solve the real life problem. The model has the following elements:
1) Variables that represent the available choices
2) The mathematical expression that relates to the variables and the conditions involved
Linear programming generates solutions that are based on the characteristics and features of the actual situation or problem. Therefore, the application of linear programming is very broad and can find solutions in diverse fields like marketing. In fact, this technique is very successful in marketing and distribution management, among other areas. For example, a marketing manager can use linear programming to allocate a fixed advertising budget across several media channels to maximize audience exposure.
Requirements for Linear Programming
Linear programming problems have four main elements in common:
1) The objective of linear programming is to find an expression that minimizes or maximizes some quantity, from cost to profit, which is called the objective function.
2) The constraints or restrictions limit the extent the objective can be pursued and accomplished.
3) There must be more than one alternative course of action to take when it comes to linear programming because it is a tool that figures out which decision is the best course of action for allocating resources.
4) Finally, both the objective and constraints must be expressed in terms of inequalities of linear equations.
One of the most basic and used applications in linear programming is the product-mix problem, which involves allocating resources to one of two products. In the end, the company wants to figure out how much of the limited resources to use for each product to maximize profits or minimize costs. However, when it comes to marketing, there are two main applications of linear programming, media selection and marketing research.
How Can Linear Programming Be Used for Media Selection or Market Research?
One of the best ways to allocate a fixed advertising budget across many forms of media outlets, like magazines, newspapers, radio commercials, direct mailing, or television commercials, is to use linear programming. The aim of media selection using linear programming is to maximize audience exposure to different media channels. This means that marketing managers must determine the number of viewers reached, cost per advertisement, number of ads run, amount of exposure, budget, among other restrictions, and then compute which advertising media selection is the best plan of action.
Similar to the process of determining the best plan of action when it comes to media selection, linear programming can also be used to determine the best way to do market research. This means organizing the research staff to find the best information, using tools like surveys or focus groups. Furthermore, linear programming can also be used to determine the overall marketing strategy, from the allocation of the sales force to the advertising efforts. Both of these marketing applications are aimed at increasing profit and sales.
Limitations of Linear Programming
Even through linear programming has a ton of real life applications, the technique does have a few limitations, including:
1) Multiple objectives are not considered
2) Uncertainty of costs or other factors
3) Indivisibility - not all variables are divisible into a fraction
4) Nonlinear relationships may occur as a result of expansion or contraction
5) Sequential problems exist and this technique assumes a single, one-time decision-making process
However, there are many benefits that can be derived from using linear programming techniques, from increasing profits to minimizing costs, and marketers should understand how to use this technique to make better decisions.
Linear programming is a mathematical tool that is applied to marketing applications, such as marketing research or media selection, to make allocating scarce resources easier. Linear programming has many benefits, like minimizing costs or increasing profits, and a few limitations, from not considering the effects of Indivisibility to nonlinear relationships.
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Marketing Applications of Linear Programs for Media Selection & Marketing Research Quiz
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How can linear programming be used in marketing?
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