Monitoring a marketing budget as per marketing objective
The marketing plan was launched in the rural & suburban areas
of Wollongong, generating a lot of activity. Your CEO has given
specific instructions that there should neither be any wastage in
the budget nor any corners need to be cut.
So you have been very carefully monitoring the marketing budget whilst the
campaign has been going on. The budget / campaign has now been on for
almost 3 months & now it’s the time to look at the Actual vs Budgeted figures
for the marketing expenses & take corrective action for the balance of the 3
You observe the following things while monitoring the marketing plan in action
for these 3 months:
f The Shrub Master logo appears quite smudged & unclear on a 7 X 5 size
of flier. Plus the font was also not quite readable. So you had to redesign
the logo placement & get full colour mailers printed on a 9 X 6 mailer, on a
matte type finish. The designing now cost you $600 & the fliers cost you $450
for a stack of 1500 mailers.
f On one occasion you found that the flier distribution boys were simply sitting
& chatting in a café & on another occasion you found that a whole bunch of
fliers were thrown in a trash bin. So you decided that one of your junior staff
members should supervise these boys. You paid your staff member an extra
$20/hr for supervision & surprise visits. The total hours that were spent on
this supervision were around 25.
f The mailer campaign was repeated 7 times.
f Your CEO suggested & you repeated the “Daily Herald” advertising for 7
f As regards to the radio advertising, it was decided to have a popular radio
show host – Michael Brumby, interview your CEO wherein your CEO would
talk about the great things of the new products. This spot was purchased
at the rate of $4500 for a 10 min spot. Looking at the amount of proposed
booking for the radio advertising, the radio station decided to give you a
discount. The special price for you, now is $1700 per 60 second ad.
Prepare the Actual ad spent at the end of the 3 month period.
Compare the Actual money spent with the budgeted & provide the variance
(Variance = Budgeted minus Actual. If negative, its U – Unfavourable & if
positive, its F – Favourable)
Part B total: 20 mark