BSBMKG514 Assessment 2

Part A - Making a marketing expense budget

Expense budget for each activities of the marketing campaign of Shrub Master Corporation for the first
of 3 months is below

 Mailer distribution campaign

The mailer campaign was repeated 8 times

Cost per Times

Expense 1 2 3 4 5 6 7 8 Total

Designing cost $550 - - - - - - - $550

Printing cost
$7001 $700 $700 $700 $700 $700 $700 $700 $5,600
(1600 mailers per times)

Hire cost (6 boys) $4203 $3002 $300 $300 $300 $300 $300 $300 $2,520

Total $8,670
1
$350 for a stack of 800 mailers but the campaign need 1,600 mailers that is cost of $700
2
Hire 6 boys working 5 hours a day, pay $10 per hour. Cost per time are 6 boys X 5 hrs X $10 = $300
3
include training cost of $120

 Newspaper Advertising

Cost per Times

Expense 1 2 3 4 5 Total

Designing cost $500 - - - - $500

Advertising cost $9000 $9000 $9000 $9000 $9000 $45,000

Total $45,500

 Radio Commercial

Expense Cost

Advertising cost
$320,0001
(8 times per day, 20 days)
 Ads/jingles and charges (per
$750
jingles)

Total $320,750

1
$2000 per 60 second, Advertise for 8 times per day, 20 days. So $2000 x 8 times x 20 days = $320,000

 Total budget for this marketing campaign are shown in the table below

Activities Cost

Mailer distribution campaign $8,670

Newspaper Advertising $45,500

Radio Commercial $320,750

Total $374,920
 Part B – Monitoring a marketing budget as per marketing objective/ plan
Task 1 Prepare the Actual ad spent at the end of the 3 month period

 Mailer distribution campaign

The mailer campaign was changed to repeat 7 times from 8 times

Expense Cost

First design cost $550

Redesign cost $600

Filers cost (1600 mailers per times, 7
$3,3601
times)
Hire cost (6 boys)
$2,2202
Supervision cost ($20 per hour, 25
$500
hours)

Total $7,230

1
$450 for a stack of 1500 mailers but the campaign need 1,600 mailers that is cost of $480. For 7 times
are total cost of $3,360 ($480 x 7 times)

2
Hire 6 boys working 5 hours a day, pay $10 per hour, repeat 7 times. Total cost are 6 boys X 5 hrs X $10
X 7 times = $2,100 and plus training cost on the first day $120. So that it is $2,220

 Newspaper Advertising

Repeated times of the newspaper advertising was changed to be 7 consecutive Saturdays from 5
consecutive Saturdays

Cost per Times

Expense 1 2 3 4 5 6 7 Total

Designing cost $500 - - - - - - $500

Advertising cost $9000 $9000 $9000 $9000 $9000 $9000 $9000 $63,000

Total $63,500
  Radio Commercial

The radio station decide to give us a special price $1,700 per 60 second ad

Expense Cost

Advertising cost
$272,0001
(8 times per day, 20 days)

Ads/jingles and charges (per

$750
jingles)

Spot cost $4,500

Total $277,250

1
$1700 per 60 second, Advertising for 8 times per day, 20 days. So $1700 x 8 times x 20 days = $272,000

Task 2 Compare the Actual money spent with the budgeted & provide the variance

Budgeted Actual Variance

Activities Result
(A) (B) (A-B)

Mailer distribution campaign $8,670 $7,230 1,440 Favourable

Newspaper Advertising $45,500 $63,500 -18,000 Unfavourable

Radio Commercial $320,750 $277,250 43,500 Favourable

Total $374,920 $347,980 26,940 Favourable

Total actual of mailer distribution campaign and Radio commercial are less than the budgeted
that show result of Favourable. But total actual of Newspaper Advertising is more than the budgeted
that show result is Unfavourable. Finally, the total actual of all activities in this campaign are less than
the budgeted that indicate result is “Favourable”.
Part C – Marketing Report
Task 1 Marketing report/ Marketing report writing to CEO &
Task 2 Use & illustrate the required graphs / bar charts to show the fluctuation between the budgeted
& actual marketing figures for each of the components.

12 September 2018

Subject Budgeted and Actual spent of new product marketing campaign

Dear Mr. Robin Williams CEO of Shrub Master Corporation

According to CEO require marketing campaign for introducing a new range of cordless, silent,
electric power driven lawn mowers both for the large and small households. The marketing campaign
has three activities including Mailer distribution campaign, Newspaper Advertising and Radio
Commercial that spread over 6 months. As I am marketing manager, I made a marketing expense
budget for the first 3 months period and monitored marketing plan in corrective activities as well as
actual spent while campaign has been going on of the 3 months.
Details of each activity in previous marketing plan and correction action with reason of any
changes are shown in the table 1. From any correction action in activities that lead to the budgeted
change from the fist making. There is Budgeted and actual spent of each activity in the table 2.

Table 1 : Detail of each activities in previous marketing plan and correction action
Activities Previous marketing Corrective action Reasons
plan
Mailer distribution campaign
Logo and mailers format - Hire to design on - Redesign on 9”x 6” size - Logo appears quite smudged
7”x5” size of mailers of mailers &unclear
($700 for 1,600 ($480 for 1,600 mailers) - Font was not quite readable
mailers) - Design cost $550 +
- Design cost $550 Redesign cost $600
Number of mailers per 1,600 1,600 -
times
Repeated times of 8 times 7 times As appropriate
campaign
Hire 6 boys to distribute No supervisor - A Junior staff member Found these boys were sitting
mailers supervise these boys and chatting in café and found
- Paid for the supervisor the bunch of filers were thrown
$500 in a trash bin
Newspaper Advertising
Advertisement design Hire to design - -
Size of advertising Full page single - -
Repeated times of 5 Consecutive 7 Consecutive Saturdays As suggestion of CEO
campaign Saturdays
Radio Commercial
Advertising cost $2000 per 60 second $1700 per 60 second ad Special price from radio station
ad
Repeated times of 8 times per day, 20 8 times per day, 20 days -
campaign days
Ads/Jingles& charges $750 per jingle $750 per jingle -
Spot radio - - Interview CEO about As decision in the meeting
the new product
- $4500 for 10 min spot

Table 2 : Budgeted and Actual spent of each activity for the marketing campaign

Budgeted Actual Variance Result

Activities
(A) (B) (A-B)
Mailer distribution campaign
First design cost $550 $550
Redesign cost - $600
Filers cost $5,600 $3,360 - -
Hire cost (6 boys) $2,520 $2,220
Supervision cost - $500
Total $8,670 $7,230 1,440 Favourable
Newspaper Advertising
Designing cost $500 $500
- -
Advertising cost $45,000 $63,000
Total $45,500 $63,500 -18,000 Unfavourable
Radio Commercial
Advertising cost $320,000 $272,000

Ads/jingles and charges $750 $750 - -

Spot cost - $4,500

Total $320,750 $277,250 43,500 Favourable

Total $374,920 $347,980 26,940 Favourable

Moreover, the figure 1 and figure 2 below show difference between budgeted and actual spent
and differences of total of both, respectively.
Figure 1 Budgeted and Actual spent of each activity for the marketing campaign

Figure 2 Total of Budgeted and Actual spent for the marketing campaign
In conclusion, Total of actual spent is less than the total budgeted for the first 3 months of the
campaign. That shows the result is favourable.

Budgeted Actual Reasons for corrective action Variance

Activities
(A) (B) (A-B)
Mailer distribution campaign
First design cost $550 $550 - -
Redesign cost - $600 - Redesign on 9”x 6” size of mailers
from 7”x5” because logo appears
quite smudged &unclear and font
-
Filers cost $5,600 $3,360 was not quite readable
- Campaign was changed to
repeat 7 times from 8 times
- Campaign was changed to
Hire cost -
$2,520 $2,220 repeat 7 times from 8 times
(6 boys)
Hire a Junior staff member supervise
these boys because
Supervision cost - $500 found these boys were sitting and -
chatting in café and found the bunch
of filers were thrown in a trash bin
Total $8,670 $7,230 - 1,440 (F)

Newspaper Advertising
Designing cost $500 $500 - -
Repeated times was changed to be 7
Advertising cost $45,000 $63,000 consecutive Saturdays from 5 -
consecutive Saturdays
Total $45,500 $63,500 - 18,000 (U)
Radio Commercial
Special price $1,700 per 60 second ad
Advertising cost $320,000 $272,000 -
from radio station
Ads/jingles and
$750 $750 - -
charges
Spot cost - $4,500 Interview CEO about the new product -
Total $320,750 $277,250 - 43,500 (F)
26,940
Total $374,920 $347,980 -
(Favourable)