BIZ201 Assessment: Promotional Budget Analysis and Planning

This report provides a detailed analysis of a promotional budget, encompassing various aspects of financial planning and marketing strategies. The report begins with an overview of the overall budget and its allocation across different promotional activities, including print and digital advertising. It then delves into cost-volume-profit analysis, examining the relationship between costs, sales volume, and profitability. The report further explores the financial implications of different scenarios, such as hotel accommodation and event management costs, considering variable and fixed expenses. The analysis includes break-even point calculations and contribution margin ratios to assess the financial viability of various promotional strategies. The report also incorporates references to academic sources to support its findings and recommendations. Furthermore, the report analyzes the functions and events department's assessment, including per-unit costs, guest numbers, and event staff rates, to provide a comprehensive understanding of the budget's impact on various business operations.

Running head: PROMOTIONAL BUDGET
Promotional Budget
Name of the Student:
Name of the University:
Author Note:

1
PROMOTIONAL BUDGET
Sales and Marketing Department Assessment
Task 3:
Overall budget: $ 35000
Budget of opening event: $20200
Remaining budget: $14800
Particulars
Per
week
cost($)
No of
weeks Total($)
Source of budget 35000
Opening event budget 20200
Promotional activities 14800
The Paramatta Times(Full page) 5445
Digital Foyer Avertising 275 4 1100
Bus shelter lead panel(Paramatta Metropolitican area)(Lead
panel) 715 4 2860
Flyers(A6-one sided) 259 4 1036
Shopalite 393 4 1572
Total expenditure of promotional activities 12013
Budget surplus 2787
The promotional activities chosen are the Paramatta Times full page advertisement,
digital foyer advertising, bus shelter lead panel flyers and shopalite (Kim et al., 2016). This
choice of promotional activities can be justified on the ground that the expenditure towards these
promotional options remain within the budget allocated to the promotional activities of $ 14800
(Chong et al., 2017).
Task 4:
$
Crystal hotel accomodation cost/person/night 80

2
PROMOTIONAL BUDGET
Variable cost per person 35
Fixed cost per year 40000
Contribution=(Total revenue-variable
cost)/units sold 45
Contribution margin ratio=(sales-variable
exp)/sales 0.5625
BEP=fixed cost/contribution margin per unit
888.888
9
Particulars
$
Total
number
of
nights
in a
year
Total of
person Total
Sales per person per night 80 365 8 233600
Less:
Variable cost per person per night 35 365 8 102200
Fixed costs 40000
Net profits 91400
As shown above the hotel should serve 8 persons. This is because upon serving 9
persons, the net profit would earn more than $100000.
Cost volume profit analysis is important because it allows business organisations to
recognize the minimum amount of profit which they have to earn to be able to meet their costs.
The organisations are therefore able to set the target sales which they are able to achieve in order
to meet their expenses and earn high profits.
Functions and Events Department Assessment:
Task 3:
Per unit
costs($) Total($)
Overall budget 20500

3
PROMOTIONAL BUDGET
No of guests 300
No of hours 5
Chair Cover Hire - Black Lycra with Aqua
& Hot Pink Lycra Bands(pcs) 300
Gift Hampers(pcs) 10
Open Entertainment(hrs) 3
Balloon centerpieces(pcs) 30
Guest Gifts(pcs) 300
Food Based on $30.08 per person 30.08 9024
Beverage based on $9 per person 9 2700
Event staff rate/hr 22 110
Task 4.
$
Crystal hotel accomodation
cost/person/night 100
Variable cost per person 40
Fixed cost per year
900
0
Contribution=(Total revenue-variable
cost)/units sold 60
Contribution margin ratio=(sales-variable
exp)/sales 0.6
BEP=fixed cost/contribution margin per unit 150
Particulars $
Total number of nights in a
year
Total of
person Total
Sales per person per night 100 365 5
18250
0
Less:
Variable cost per person per night 40 365 5 73000
Fixed costs 40000
Net profits 69500
Cost volume profit analysis enables in deciding the minimum profit businesses have to
earn to cover the expenses. For example, the example shows to earn a profit of minimum

4
PROMOTIONAL BUDGET
$50000, the hotel has to serve at least 5 guests under the given situation in the case study
(Ahmad & Saber, 2015).

5
PROMOTIONAL BUDGET
References:
Ahmad, S. Z., & Saber, H. (2015). Understanding marketing strategies with particular reference
to small-and medium-sized hotel businesses in the United Arab Emirates. Tourism and
Hospitality Research, 15(2), 115-129.
Chong, A. Y. L., Ch’ng, E., Liu, M. J., & Li, B. (2017). Predicting consumer product demands
via Big Data: the roles of online promotional marketing and online reviews. International
Journal of Production Research, 55(17), 5142-5156.
Kim, J., Kim, P. B., Kim, J. E., & Magnini, V. P. (2016). Application of construal-level theory to
promotional strategies in the hotel industry. Journal of Travel Research, 55(3), 340-352.