TP2

Assignment Overview

  • Course Code: MKT451 SWS F25

  • Task: Write a request for a marketing budget increase.

  • Paper Length: 5 to 6 pages including proforma ROMI and references.

Scenario Details

  • Role: Marketing product manager in a consumer products company.

  • Product Category: Select your own consumer product category (e.g., candles, dishware, clothing, home decorating).

  • Company Age: 10 years, with solid growth.

  • Income Statement (Current Fiscal Year):

    • Sales (Revenue): $250 million

    • COGS: ($162.5 million)

    • Gross Profit: $87.5 million (35% of Sales)

    • SG&A: ($60 million)

    • Operating Profit: $27.5 million

  • Current Marketing Budget: $20 million

  • Proposed Budget Increase: Up to $1 million in the current fiscal year, potentially more next year.

Proposal Requirements

  • Focus: A proposal for an additional marketing initiative to generate growth for this year and create “momentum” for the next year.

  • Concerns:

    • Capacity of the marketing team to handle an additional initiative.

    • Persuading upper management to allocate an additional $1 million for marketing.

  • Thought Process:

    • Envisioning the allocation of $1 million towards a digital marketing strategy that integrates social media platforms, the company’s website, and artificial intelligence.

Suggested Steps

  1. Select a Consumer Product Category:

    • Choose a product typically sold through retail channels like Target, Meijer, or specialty stores.

  2. Research Digital Marketing Mechanisms:

    • Investigate various digital marketing strategies and their applications in marketing.

  3. Select Three Digital Marketing Mechanisms:

    • Develop arguments for each as marketing tools for your chosen product within a retail context.

    • Consider “push” and “pull” strategies in the digital landscape.

  4. Refamiliarize with Income Statements and ROMI:

  5. Consolidate Your Argument:

    • Follow the structure used in TP#1 and include a ROMI proforma as instructed.

Two Year ROMI Proforma

  • Structure of Proforma:

    • Year 1

    • Year 2

  • Metrics to Include:

    • Sales (revenue in $1,000): ___ ___

    • COGS: ___ ___

    • Gross Profit (GP): ___ ___

    • Marketing Investment (MI): 1,000 ___

    • Net Marketing Contribution (NMC): ___ ___

    • Return on Marketing Investment (ROMI): ___ ___

  • Assumptions:

    • All figures are incremental (additional), expressed in $1,000.

    • COGS assumed to be 65% of sales.

    • NMC calculated as {NMC = GP - MI}.

    • ROMI calculated as {ROMI = rac{NMC}{MI} - 1}.