Business Analytics: Costing and Revenue Behavior, Advertising Expenditure Impact, and Marketing Strategies

This report discusses costing and revenue behavior, the impact of advertising expenditure on sales, and marketing strategies for gaining a competitive advantage in the fitness industry through business analytics. It includes mathematical models, graphs, correlation analysis, and recommendations for marketing managers.

Business Analytic

Table of Contents
INTRODUCTION...........................................................................................................................3
TASKS.............................................................................................................................................3
Question 1....................................................................................................................................3
Question 2....................................................................................................................................5
Question 4....................................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The practise about using quantitative approaches to extract value from data to create better
company operations is known as business analytics (Al-Mudimigh, Zairi and Al-Mashari, 2018).
BA is really a collection of knowledge, tools, and methods that are used to analyse a firm's
findings and analysis throughout order to generate knowledge and create data-driven mistakes in
coping with the best. BA's mission is to determine which databases are valuable but which can
boost sales, growth and performance. When it comes to private companies and processing
information from a large number of channels, BA includes multiple applications. Cloud apps,
marketing automation systems and CRM systems are also examples of this methodology. To find
trends in databases, use predictive analytics as well as statistics. These dynamics will assist
others in predicting future movements and gaining new insights into the customer and the
attitudes. In actual, keep an eye on KPIs and patterns and this allows companies to not only
provide all of their information in one location, as well as to create fast and reliable decisions.
This should be focused on the latest up-to-date facts. They should be confident that they are well
prepared about not one, but many separate cases because BA has such a large array of evidence
to back up the decisions.
In the report, three question are addressed related with costing and revenue behaviour,
impact of advertising expenditure on sales and company can gain a competitive advantage in the
fitness industry by adopting other relevant marketing strategies. In addition, national statistical
archives for any two economic variables which are correlated that is GDP and employment is
discussed in this report.
TASKS
Question 1
A) Mathematical model
The mathematical model for the above cost information is as follows:
Budgeted annual output= 180000 unit
Fixed cost= 60000
Variable cost= 0.75 per unit = (0.75 * 180000) = 135000
Sales price = 2. Per unit = 360000
B) Profit or loss of MKF Ltd.

Total profit for the company for the above information is calculated below:
Profit = Sales – (Fixed cost + variable cost)
= 360000 – (60000+135000)
= 360000 – 195000
= 165000 GBP
C) Draw a graph with a spreadsheet
Sales Fixed cost Variable cost Profit
0
50000
100000
150000
200000
250000
300000
350000
400000
360000
60000
135000
165000
Chart Title
D) Analyse and comment on the costing and revenue behaviour.
Management's effort to explain how operational costs change in response to changes during a
firm's level of operation is known as cost behaviour analysis. Direct supplies, direct labour, and
operating expenses paid during the development of a commodity are examples of these factors.
Cost behaviour analysis is usually carried out by management using statistical cost functions.
Cost functions describe how an expenditure (e.g., inventory, labour, or overhead) varies as the
amount of operation associated with this same price reductions (Boatright, 2017).
Cost Analysis in Quantitative Form
To explain estimation methods, management often employs quantitative research techniques.
The high-low process is perhaps the most straightforward method. Only certain maximum and
minimum amounts of the costing system, as well as their respective costs, are used to calculate
the gradient descent in this process. While this strategy has a number of drawbacks, it is a
straightforward first effort at analysing the relationship seen between costing system and total
costs (Chakraborty and Chuan, 2019). Another approach that incorporates statistical techniques

to calculate the overall amount of dependant variable as a result of dependant variable seems to
be regression model. The regression method provides a much more accurate picture of the
situation. This is straightforward. The money earned from the selling of the production is
referred to as a company's total revenue. As a result, the net revenue is determined by the output
cost per share and the amount of units delivered. As a result, the formula is mentioned below:
TR = Q x P
Where,
TR – Total Revenue
Q – Quantity of sale (units sold)
P – Price per unit of output
The revenue earned by a company per level of product sold is known as average revenue. As
a result, dividing the gross sales by the estimated products sold yields the annual value.
AR =\frac {TR}*{Q}$$
Where,
AR – Average Revenue
TR – Total Revenue
Q – Total units sold
The sum of funds received by a company from the selling of an extra unit is known as
marginal revenue. To put it another way, it's the extra money a company makes anytime an
initial increase is selling by the company.
MR = TRn – TRn-1
It's also crucial to consider the partnership around TR, AR, and MR in addition to
understanding the fundamentals of sales. TR, AR, and MR are all equal until the first component
is delivered (Covin and Slevin, 2017). As a result, all 3 curves begin at the same stage.
Furthermore, the TR curve curves forward as well as MR is optimistic. If, on the other side, MR
decreases as the quantities of sales increases, the TR curve would rise at a slower pace. The TR
graph achieves its optimum level as the MR slope crosses the X-axis. Furthermore, once the MR
curve crosses the X-axis, this same TR curve begins to slant downwards. Any shift in AR leads
to a significant increase in MR. As a result, if the integrated form has a steeper coefficient, the
MR curve will have a smaller slope and would be below that as well. If indeed the AR curve

does have a steep value, the MR curve will have a stronger incline and will rest from above. The
MR slope agrees mostly with AR graph if this is similar to that same X-axis.
Question 2
A) Correlation coefficient of advertising/sales
year
advertis
e
expense
s
sales
revenu
e
2016 2 60
2017 5 90
2018 4 70
2019 6 100
2020 3 80
Correlation between expenses on advertisement and sales revenue
Colum
n 1
Colum
n 2
Colum
n 1 1
Colum
n 2 0.9 1
Interpretation: The most popular blunder is believing a correlation of less than or equal to one
is statistically meaningful. A reading of +/- 1 raises the likelihood of true statistically significant,
but it really is difficult to tell without further research. For a variety of factors, statistical testing
of a correlation may become complicated; it is far from easy. One of the most important
assumptions of comparison is that even the variables are normally distributed and that their
relationship becomes linear. In theory, you'd put these statements to the test to see if a correlation
measurement is necessary. The second most popular blunder is failing to process the information
to a standard system. The measurements have already been normalised when measuring a
correlation between two betas: beta is really the unit. If they wish to associate stocks, though,
they must convert them to percentage returns rather than stock value adjustments. Even among
financial managers, this occurs all too much (Finkelstein, Hambrick and Cannella, 2017).
B) Plot a scatter diagram of the data

2015.5 2016 2016.5 2017 2017.5 2018 2018.5 2019 2019.5 2020 2020.5
0
20
40
60
80
100
120
Chart Title
advertise expenses
Exponential (advertise expenses )
sales revenue
Linear (sales revenue )
Interpretation: "Revenue costs" are all expenses incurred in day operation and management of a
company, the impact of which is entirely exhausted during the current accounting year. These
expenses are recurring throughout definition, i.e., they are performed to fulfil a company's day-
to-day needs, and their effect is often short-lived, i.e., the revenue is realised by the corporation
during the revenue recognition year. These charges are sometimes referred to as "expenditures or
discontinued costs." For example, goods obtained, salaries charged, shipping, rent, travel costs,
stationery acquired, benefits paid on products bought, and so on. This expense is made on goods
or services that are valuable to the corporation but will be used up in much less than a year,
increasing the company's profit-making ability only briefly. Revenue spending also covers the
costs of purchasing raw materials and storing them in order to manufacture saleable products, as
well as the costs of keeping capital assets in proper working order, such as equipment, buildings,
and furniture (Hosmer, 2017). A stockholders' equity portfolio, such as Shares Outstanding, is
compensated if the balance earned is an extra contribution from the company's owner. The
account to be credited is a sales account such as Service Revenues or Fees Earned where the
money collected is from a cash transaction or for a service that has just been completed but not
yet been reported. The account to be paid is Unearned Revenue if indeed the money collected is
an upfront charge for a benefit which has not been completed or earned. The account to be paid
is Receivables if the money obtained is a deposit by a buyer for a previous sale or service that
was already reported as income. The account to also be received is Notes Payable if the money
earned is the result of the company authorizing a letter of credit.

C) Analyse the impact of advertising expenditure on sales and advise the marketing manager
on how the company can gain a competitive advantage in the fitness industry by adopting
other relevant marketing strategies.
Marketers are becoming more conscious of the significance of maximising shareholder capital,
which necessitates an assessment of the long-term impact of their decisions on product-market
sentiment and market sentiment. However, current study has historically concentrated on the
revenue or benefit response through marketing activities, and marketing objectives have
generally been conceived from the viewpoint of the consumer. A few analyses of long-term
consumer reaction to marketing behaviour having recently been reviewed. One critical part of
this effect seems to be the long-term association between media investment and enterprise value,
which is the subject of the current study. Advertisement, according to the writers, will have a
direct impact on valuation, as opposed to an indirect effect by market revenue and benefit
reaction. The observational findings from two sectors support the theory that advertisement
investment has a favourable, long-term effect on a company's share value while having a
devastating effect on a rival of similar scale (Jarrar, Al-Mudimigh and Zairi, 2017). The authors
calculate the size of the investor reaction impact and explore the consequences for future studies.
Some of the main marketing strategies which company may use in fitness industry to attain a
good marketing position are discussed below:
MARKETING of CONTENT
To affect purchasing behaviour, content marketing stresses education over sale. This competitive
marketing strategy focuses on generating and disseminating knowledge specific to customers'
interests in order to target those that are more compatible with and willing to purchase goods or
services. Since correspondence is ongoing, material may be customised to show what you hear
about leading throughout time, which can take the form of visualisations, web sites, videos,
photographs, journals, research papers, online training, and digital books, among other formats.
It's essential to bear in mind that marketing strategy isn't the same as marketing strategy (more
on inbound below). While digital advertising is an integral part of a comprehensive inbound
approach, do not include other terms of economic to optimise the importance of content.
Get a short guide.

Creating tutorial videos is among the most popular ways to spread the word about
the business. People will learn more valuable if they teach them something. Take them through
all the process. Take their hands in company product. Step-by-step instructions are mostly the
rage these days. The great they are at it but the further interest that give, the faster it will be able
to increase that exposure and, as a result, increasing profits. YouTube is also the nation's fastest
search engine, trailing only Google. They go there if they really want or learn anything
creatively. They don't have to be on video yet, and then you will almost certainly need to be
heard. Over practice, they become accustomed to it. However, they can't deny YouTube's
popularity and scope, so go and begin creating genuine, meaningful awesome videos presently
(Lucas and Ogilvie, 2019).
OPTIMIZATION FOR SEARCH ENGINES
The method of increasing knowledge of and access to a website by ensuring that it remains
amongst these top compensated (or "natural") targeted ads on platforms such as facebook, Bing!,
as well as Yahoo is known as search engine marketing, or SEO. Although it's a common
misconception that SEO is a stand-alone marketing technique, it's really a set of strategies that
work together to create a successful inbound marketing plan. Although new networking,
facebook, content marketing, as well as other marketing strategies help drive traffic to a website,
SEO awareness is especially important since web it grows your market in such a relevant,
focused way by allowing them to personality as anyone involved in your service or product
(Nwankwo, 2020). Pages are perhaps the most common way for people to find information
online.
RETARGETING AND ACCOUNT BASED MARKETING
Account Based Marketing (ABM) is just a B2B technique that uses highly tailored
promotions to reach a specific group of customers. It offers a range of benefits to marketing and
management departments, including a quicker sales channel, lower costs, and better use of
promotional tool. Despite all of the benefits of ABM, it's crucial to keep in mind that this was not
the same for everyone directed marketing communication. It was a lot more strategic now, with
tools like web retargeting helping to individualise advertising campaigns. Users that accessed the
site however left (or "bounced") before entering into an agreement or transformation are
identified using application cookie-based technologies. The cookie enables tailored ads to appear
in future web searches and communications with certain users, even though they are unrelated to

your site. Since it keeps the product next to consumers who are still involved in certain service or
product, create targeted is an important conversion method.
Make the best associate network.
The majority of people are unaware of the influence of affiliate marketing. Affiliates might
be a huge source of growth fuel. However, finding the right companions may not always be
straightforward. If company want the larger affiliates to believe anything they say and must have
a high convert rate. It's been difficult for manager to navigate the affiliate minefield. Seeing it
though requires perseverance and grit and determination. After just a few losses, most of them
get frustrated, but they can't let emotions control of affiliate marketing. Create an affiliation
network and begin contacting prospective affiliates that may help others. A referral from a client,
colleague, or work colleague provides built-in reputation, and this can generate scores of
prospects who are looking forward to having a good encounter with the business. Popular instant
messaging marketing, also known as online marketing, is the use of the internet and email to
promote and drive e-commerce purchases. To exploit market presence to advertise services and
products, media platforms can be used. These campaigns are often combined with standard
commercial formats such as radio, broadcast, and newspaper. There was a lot that could be done
about online ratings and comments as well. Word-of-mouth advertisement is free, natural, and
very effective since people who have positive words to say more about goods or services have
little to benefit from that other than spreading the word (Preedy, Glatter and Wise, 2018).
Question 4
A) Research the monthly digest of statistics or the national statistical archives for any two
economic variables which you think may be correlated.
The correlation between GDP and employment have been discussed as there have been
positive relation between level of more and more worker with the economic growth.
So, while government spending increases GDP growth marginally and helps to eliminate
unemployment for just a length of time, it's not really prudent for the money to be spent
excessively on social welfare because it will lead to increased costs and higher deflation. Since
the principle of economic growth is difficult to grasp as well as summarise here, this recommend
reading the primary sources given below to get a clearer understanding of how income works
and how everything affects the economy.

Anyway, just because you have a clearer understanding of stuff, encourage me to expand on
some of the details that have been already discussed in the above responses. So, when someone
previously said, the jobs generated by agriculture is not included in the GDP. Yeah, it is in
simplistic words, but in economic terms, we have a concept known as "Involuntary
Unemployment." Aside from that, an economy does not depend solely on cultivation; it's indeed
important to build a manufacturing economy due to qualified workers and productive production,
meaning a more reliable GDP growth statistic than one based solely on food production, which
brings us back to whether the economy is influenced by heavy rainfall. Then what happened is
whether a worker is happy to work at the current pay rate but is unable to find work due to the
abundance of labour stimulate the economy. This causes an economic imbalance that cannot be
explained by a "Demand-Supply Curve." As a result, policymakers have proposed a variety of
hypotheses. “Keynes's General Notion of Employment” is stated in the footnotes below. The
book “Interest as well as Money” explains that developing economies will never achieve high
employment (Shrivastava and Nachman, 2020).
B) Critically analyse and present your results in writing to the interview panel.
One theory proposes that the two cycles are linked: Since during the recent crisis, the jobless
rate rose more than expected considering the overall decline in GDP, the rate declined more than
anticipated and during recent recovery (Wynstra, Van Weele and Weggemann, 2018). This
theory suggests that variations from Okun's law is evenly distributed seen between two ages, and
also that the previous historical evidence may be used to make future predictions. The scree plot
of the final battle, on the other hand, tells a different storey about the healing. The relation
between shifts inside the employment rates as well as the workforce ratio changed away again
from global pattern even during recovery.
Over the previous crisis, the same rise in the ratio resulted in a greater reduction throughout
the employment rates. According to the historical connection, if the workforce ratio remains
unchanged, the employment rates would therefore remain stable. But while the proportion
remains stable, the job growth decreases by one tenth of a percent, according to the stabilisation
relationship. As a result, shifts throughout the employment-to-population proportion alone will
not justify the dramatic decrease mostly in budget deficit mostly during economic downturn, as
they have in the past. To produce useful results, such an analysis must be subdivided into
economic sectors (Storey and Salaman, 2019).

The degree to that which job expansion is linked to and led by a productive transition is
critical to the medium to long viability of economic development. Real wages, productivity
levels, labour participation rates, but mostly employment speed of growth as well as suppleness
of demand with reference to demand (this last metric tests how much job creation is correlated
with 1 per cent of job creation) are among these indicators. Policymakers should be concerned
about the decrease in the work satisfaction of development. The trend or existence of
development, on the other hand, is essential (Taylor, 2017). Economic growth has an effect on
the production of meaningful tasks not only because of pace of development, but also because of
efficiency with which growth is translated into meaningful tasks. The above is influenced by a
number of factors, including the expansion sector structure and the capital/labour strength of
expansion within particular sectors.
There is generally a desire to maximise both the amount of positions available and also the
productivity of those who work, and also their earnings. In order to ascertain whether income
growth has fulfilled the demand for more work and the research, a study of economic activity
from the viewpoint of workers should be conducted. Including jobs and good work directly in
economic development and poverty reduction strategies lets people get the most out of their
money and ensures that development is both positive and sustainable. The plight of the "working
poor" requires special consideration, people in regions with a limited mainstream employment,
where several women and men function long and tough shifts while being unable to raise enough
to pull oneself and the family out of poverty. People have spent long weekends than men by
balancing paying and voluntary work, and so this time hardship affects their desire to find steady
work (Trkman, 2017).
CONCLUSION
In the end of report, it is concluded that business analytics use machine learning, analytics,
and data warehouses, data analysis is a technique for searching through large databases to
discover patterns, patterns, as well as other facts regarding evidence which are not immediately
apparent. Regression, sequencing, and feature extraction are only a few of the data mining
approaches that BA can use to make better results. This is an important aspect of market
analytics because it allows for more rapid and reliable decision-making. Given this pattern,
developing a thorough understanding of market analytics will help users progress the career to
make smarter decisions at work.

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