Strategic Cost Reduction Analysis in Marketing Operations Dept.

This report addresses the task of reducing operational costs within a marketing department by 20%, as assigned by the Vice President of Operations. It identifies key areas where costs can be minimized based on provided data, including product performance and website effectiveness. The analysis reveals that certain products, like dresses, generate low revenue while incurring significant production costs, suggesting a reduction in their production. Additionally, the report highlights the underperformance of the 'gethere.com' website, recommending its merger with a better-performing site to save on operational expenses. The report outlines a team consisting of department representatives, business analysts, and Six Sigma specialists to address these issues. The recommendations include discontinuing the production of underperforming products, merging websites, and displaying each product separately to improve sales. The objective is to provide actionable strategies for cost reduction while maintaining the quality of care and maximizing returns.

Running head:MARKETING
Marketing
Name:
Institution:
Date:

Running head:MARKETING
Cost reduction
Cost reduction is an essential part of any organization as it helps the organization to minimize
expenses and maximize returns. The reduction of cost also helps the business to compete highly
with the rest of the competitors in the market. There a number of ways in which the company can
reduce its operation cost and the cost that is incurred in correcting the errors of the company.
(Baker,2016)
From the data given, there are a number of problems that the company is facing. The company
has some products that are not purchased together at all by the consumers such as the dress pants
and the black sports tee. The data also shows that the dress is also the least viewed tem and thus
the revenue generated from it is significantly low. This is one area that the company is incurring
a lot of cost with minimum returns. Therefore, the company can reduce the cost that it is
incurring by reducing the production of this product and channeling the production on the items
that are bringing more revenue to the company. This will enable the company to reduce on the
huge cost that it is incurring on this products with little revenue and focus more on the products
that generate high income. (Gopalakrishnan, Libby, Samuels, & Swenson,2015)
Another area that is responsible for costs is that of supporting the relevant websites that are being
visited by the clients. From the data provided, there are a number of websites that are performing
well such as the clothingconnection.com and also there is a website that is underperforming like
the gethere.com. This website has seen a decrease of 43% since last year and thus it is not
serving fully the purpose that it was intended to. Despite this, the website is still run by the
company and they continue to incur cots on it. In reducing the costs of the company, they should
consider either merging the website with another one that is also slightly performing so as to

Running head:MARKETING
save on the cost that is incurred in running it. This will ensure that the products that were being
advertised by the company are still there but at a lower cost. (Guzman, Gitelis, Linn, Ujiki,
Waskerwitz, Umanskiy,& Muldoon,2015)
Presentation outline
Objective: The objective here is to try and suggest appropriate ways of reducing operation costs
incurred by the company.
Team makeup: The team that I have consists of the department representative, business analysts
and sigma specialists.
Data description: The data relates to the performance of the various types of clothing and is
split into monthly segments.
Data analysis steps
Data was individually separated
Chart was created to show the highest costs
Examined the total cost for each product
Research on cost reduction strategies
Information on cost reduction captured in report
Recommendations
Stop the production of the underperforming product
Merge the websites

Running head:MARKETING
Display each product separately ( Lovelock, & Patterson,2015)

Running head:MARKETING
References
Baker, M. J. (2016). What is marketing?. In The Marketing Book (pp. 25-42). Routledge.
Gopalakrishnan, M., Libby, T., Samuels, J. A., & Swenson, D. (2015). The effect of cost goal
specificity and new product development process on cost reduction
performance. Accounting, Organizations and Society, 42, 1-11.
Guzman, M. J., Gitelis, M. E., Linn, J. G., Ujiki, M. B., Waskerwitz, M., Umanskiy, K., &
Muldoon, J. P. (2015). A model of cost reduction and standardization: improved cost
savings while maintaining the quality of care. Diseases of the Colon & Rectum, 58(11),
1104-1107.
Lovelock, C., & Patterson, P. (2015). Services marketing. Pearson Australia.