Scenario - Additional Information - During the initiation stage the Project Manager met with the Marketing Director to find out more about the requirements of the promotional calendar and recorded the following notes: There has been a reduction in the order numbers at the MNO Manufacturing due in part to the increased marketing activities of its competitors.
10% of customers have not re-ordered in this financial year and staff morale is poor.
A number of skilled staff have left as a result and replacement staff have not been recruited due to the reduced operation.
If the project is successful, a recruitment campaign will be required to fill the existing staff vacancies and there may be a requirement for additional staff.
Operational costs are likely to increase because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an average profit of 2k.
The Marketing department believes that sending a promotional calendar to our current and prospective customers would increase orders by at least 10% with a minimum of 10 further orders from the list of prospective customers within 12 months from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget.
She believes that the effect of a good company image portrayed by a successful calendar would last into a second year.
She has forecast the same increase in orders for a second year and predicts that the annual employee satisfaction survey will show a measurable improvement in staff morale.
A number of alternatives were explored, including: -> 20% discount for all repeat customers - not cost-effective and very short term -> A promotional calendar as a free Christmas gift - would target current and prospective customers and the benefits would last into a second year -> A series of television and press advertisements was too expensive -> A direct mail shot to all customers - benefit would be short term -> Creation of an internet website - would not suit all customers The calendar is seen as the favored option, as long as the company's competitors do not increase their marketing activity.
Whilst the Marketing department wants a very high quality, glossy product, the project management team must be aware of the cost this will incur.
Which 2 statements should be recorded under the Costs heading?
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A. B. C. D. E.BE.
Based on the additional information provided, there are several cost-related statements that could be recorded under the Costs heading. However, only two of them would be the most relevant and significant.
The two statements that should be recorded under the Costs heading are:
B. The project will be funded from the business marketing budget E. Project costs are estimated to be a total of £26.5k.
Explanation:
Statement B is important because it clarifies the source of funding for the project. The Marketing Director has confirmed that the project will be funded from the business marketing budget, which means that the project team must be careful not to exceed the allocated budget. This information is crucial for the project team to understand the financial constraints and ensure that the project is completed within the allocated budget.
Statement E is also important because it provides an estimate of the total project cost. The project team has estimated that the project will cost a total of £26.5k. This includes the cost of producing the promotional calendar, such as design, printing, and distribution costs. Knowing the estimated total cost of the project is critical for the project team to plan and manage the budget effectively.
Statements A, C, and D are not directly related to the costs of the project. Statement A provides information about the MNO marketing budget for the year, but it does not indicate how much of that budget will be allocated to the promotional calendar project. Statement C provides information about the expected benefit of the project, but it does not provide any additional cost information. Statement D provides information about the cost of the new company logo, but it is not relevant to the promotional calendar project.
In summary, the two statements that should be recorded under the Costs heading are B and E, as they provide critical information about the funding source and estimated total cost of the promotional calendar project.