Various Changes to the Marketing Campaign - Coursework Example

The paper 'Various Changes to the Marketing Campaign " is a great example of marketing coursework. The budget variance is unfavorable because actual marketing cost for the three months exceeded the master budget, which means that Shrub Master Corporation spent more on this campaign than what was planned. There are a number of reasons for the unfavorable variation as discussed below.

Marketing Activity Master Budget

Item

Description

Units

Quantity

Rate ($)

Total ($)

Mailer Distribution Campaign

Design

4 colour, 7 inches by 5 inches mailer

No.

1

550

550

Printing

Each stack has 800 mailers

Stack

2

350

700

Distributor training

Paid training

Man-hours

12

10

120

Mailer distribution

6 boys each working 5 hours a day for 8 times

Man-days

240

10

2,400

Subtotal

3,770

Newspaper Advertising

Ad design

Full page singe insert, coloured

Advert

1

500

500

Advertisement

Full page singe insert, coloured ad run for five consecutive Saturdays

Days

5

9,000

45,000

Subtotal

45,500

Radio Commercial

Ad design

60-second radio commercial/jingle

Jingle

1

750

750

Airing of commercial

60-second commercial repeated 8 times in a day

Days

20

2,000

40,000

Subtotal

40,750

TOTAL

90,020

Part B

Task 1

Actual Budget for the First 3 Months

Item

Description

Units

Quantity

Rate ($)

Total ($)

Mailer Distribution Campaign

Design

Full-color mailers printed on a 9 x 6 mailer, on a matte type finish

No.

1

600

600

Printing

Each stack has 800 mailers

Stack

1

450

450

Distributor training

Paid training

Man-hours

12

10

120

Mailer distribution

6 boys each working 5 hours a day for 8 times

Man-days

210

10

2,100

Distribution supervision

Supervision by a junior staff member

Hours

20

25

500

Subtotal

3,770

Newspaper Advertising

Ad design

Full page singe insert, coloured

Advert

1

500

500

Advertisement

Full page singe insert, coloured ad for seven consecutive Saturdays

Days

7

9,000

63,000

Subtotal

63,500

Radio Commercial

Ad design

60-second radio commercial/jingle

Jingle

1

750

750

Airing of commercial

60 second commercial repeated 8 times in a day

Days

20

1,700

34,000

Radio show host

10 minutes show

No.

1

4,500

4,500

Subtotal

39,250

TOTAL

106,520

Task 2: Variance

Newspaper Advertising

As shown in the graph above, the cost of newspaper advertising exceeded the budget by $18,000 (39.56%). The primary reason for this variance was the increase in the number of days the advertisement was run. In the budget, this was planned to run for five consecutive Saturdays, but this was increased to seven days. The cost of publishing the advert for one day was $9,000. Therefore, by increasing the number of days by two, the cost rose by $18,000. Nevertheless, the increase in the number of days the advert was published resulted to increase in publicity.

Radio Commercial

Although there was an addition of an unbudgeted activity, the 10 minutes radio show, the actual cost of the radio commercial was lower than the planned. The special rates given to the company went a long way to cut radio commercial costs by $6,000. A $300 discount was given for every 60-seconds ad, which cut the airing costs by $6,000.

However, this gain was somehow diluted by the inclusion of a 10-minute show, which cost the company $4,500. Nevertheless, the additional cost did not exceed the savings gained from the discounts the company received. In addition, the company managed to increase coverage and publicity through the 10-minute show while at the same time cutting down on radio commercial costs.

Mailer Distribution Campaign

There were changes in this element of the marketing campaign but the overall budget remained as planned.

Reduction in the number of times the mailer campaign was repeated from eight to seven cut the cost by $300. Additional cost saving was achieved during the printing of flyers cutting the cost by $250. It is, however, worth noting that instead of the previously planned 1600 flyers, 1500 flyers were printed at a cost of $450. However, this cost-saving was diluted by the inclusion of a junior staff member as distribution supervisor at a cost of $500 and an increase in design cost by $50.