Manufacture and sell own brand

Assessment Task 2 BSBMKG501 Identify and evaluate marketing opportunities
Part A
1. Read all materials required for this activity: this procedure, BBQfun simulated business, information supplied in the scenario, and information supplied in the BBQfun sales data worksheet of this assessment task.
Scenario
You are the marketing manager at BBQfun. You and your team have identified three marketing opportunities to evaluate. They are:
• Manufacture and sell own brand
• sell products through e-commerce
• sell products at bargain prices
The first opportunity is to manufacture and retail own-branded barbecues and products. Manufacture would take place at a leased plant in India as BBQfun has no manufacturing capability. Also, manufacture in Australia would be too expensive.
The second opportunity is to offer all products in an online store. Stock could be stored at no extra cost at existing stores. Customers would cover delivery costs.
The third option is to aim to increase market share by cutting the cost of products and aiming at mass appeal.
Further information is provided in the BBQfun sales data worksheet.
Each opportunity will be promoted through a $500,000 television, internet and email advertising campaign (cost accounted for in approved budget).
You will need to review the BBQfun simulated business information to determine organisational fit, profitability and operational implications for each of the three opportunities.
On the basis of the profitability index (opportunity cost estimated to be 8%) and a full appreciation of other, non-financial factors, you will need to rank these opportunities and choose one top-rated opportunity for further evaluation.
After ranking the three opportunities, you will complete your evaluation in terms of impact on operations. Information is provided in the BBQfun sales data worksheet.
You will then need to provide a report to the board of directors documenting your evaluation of identified marketing opportunities and required changes to operations.
2. Using all the information you have been provided with, fill in the blank spaces
(shaded boxes) in the BBQfun sales data worksheet in the following order:
a. Forecast the total market potential for 2017/18.
b. Use the market share for each opportunity and the total market potential to forecast the number of buyers in each category for the e-commerce market opportunity.
c. Use the number of buyers from market potential tables to calculate the unit sales volumes for the e-commerce and bargain market opportunities.
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Assessment Task 2 BSBMKG501 Identify and evaluate marketing opportunities
d. From this information, calculate estimated total revenue and gross profit.
e. Use the additional fixed costs and the BBQfun simulated budget to determine the net profit for each opportunity.
f. Use gross profit and total fixed costs from each opportunity to calculate the profitability index for each opportunity.
g. Use information from this assessment task and the BBQfun simulated business to calculate total cost of operational changes.
3. Complete your own research to supplement the information you have been provided with. Ensure that you have all the information that will enable you to address all the requirements of the report.
Part B
1. Complete a report according to the following requirements.
2. Referring to the BBQfun simulated business documentation, analyse the three opportunities outlined in the scenario in terms of likely fit with organisational goals and capabilities. Consider:
a. organisational marketing plan, structure, products and services
b. principles of marketing and the marketing mix
c. additional marketing information such as survey results in the BBQfun sales data worksheet.
3. Using information in the BBQfun sales data worksheet, evaluate each opportunity in terms of impact to current business and customer base. Evaluation should include investigation of:
a. sales volume for each opportunity in FY 2017/18
b. gross and net profit for each opportunity FY 2017/18
c. use numerical analysis or statistical methods to forecast, for example, the size of potential markets in FY2017/18.
4. consider also:
a. impact on growth plans
b. market share
c. knockout factors to rule out opportunities.
5. Assess external factors which may be relevant to each opportunity. Identify all of:
a. codes of practice and models
b. regulations
c. relevant legislation.
6. Refer to relevant BBQfun policies and procedures.
7. Referring to BBQfun simulated business documentation, summarise major costs,
benefits and risks associated with each opportunity, including risks associated with
potential competitors. Identify at least two strategies or approaches to mitigate risk.
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Assessment Task 2 BSBMKG501 Identify and evaluate marketing opportunities
8. Using information in the BBQfun sales data worksheet, assess the return on
investment for each opportunity. Calculate the profitability index for each opportunity.
9. Based on your analysis so far, rank each of the three marketing opportunities.
Justify your ranking in terms of both financial and non-financial factors (such as organisational fit).
10. Using information from the BBQfun sales data worksheet, for the top-ranked
marketing opportunity, identify changes to current operations in order to take advantage of the opportunity. Ensure changes identified are adequate to:
a. service an increased or different customer base
b. Ensure continued quality of service.
11. Ensure you can justify changes on the basis of maintaining quality.
12. Using information from the BBQfun sales data worksheet, estimate and justify resource requirements and costs for changed operations. Consider:
a. additional staff
b. distribution costs
c. equipment
d. promotional costs
e. staff training.
13. Prepare the report for the board of directors to document your evaluation of the three marketing opportunities and operational changes for the top-ranked opportunity. Ensure you include the following in your report:
a. An executive summary.
b. The results of your investigation of marketing opportunities in steps 3-8. Document the results of your investigation at each step. Consider documenting each step separately, under its own section heading.
c. For the top-ranked opportunity, the results of your evaluation of required changes to operations in steps 9-10. Document the results of your evaluation at each step. Consider documenting each step separately, under its own section heading.
14. Appropriate language and level of formality to satisfy needs of your readers:
a. formal language
b. technical vocabulary; no need to define terms such as 'marketing mix', for example
c. assume knowledge of organisational policies, marketing strategies.
15. Submit your report as per specifications below. Keep a copy of your report for your records.
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Assessment Task 2 BSBMKG501 Identify and evaluate marketing opportunities
Specifications
You must submit:
• evaluation report for the board of directors that covers all of the listed requirements.
Your assessor will be looking for:
• literacy skills to identify and interpret market information, to write in a formal style appropriate to a professional audience and to document outcomes and requirements
• numeracy skills to calculate and evaluate financial information on new marketing options
• knowledge of key provisions of relevant legislation from all forms of government, codes of practice and national standards that may affect aspects of business operations such as:
• anti-discrimination legislation and the principles of equal opportunity, equity and diversity
• ethical principles
• marketing codes of practice and conduct such as the Australian Direct Marketing Association (ADMA) Direct Marketing Code of Practice, The Free TV Australia Commercial Television Industry Code of Practice, and the Australian E-commerce Best Practice Model
• privacy laws
• Competition and Consumer Act
• knowledge of organisational marketing plan, structure, products and services
• knowledge of principles of marketing and the marketing mix
• knowledge of statistical methods and techniques to evaluate marketing opportunities, including forecasting techniques.
Adjustment for distance-based learners
• No variation of the task is required.
• A follow-up interview may be required (at the discretion of the assessor).
• Documentation can be submitted electronically or posted in the mail.
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