Marketing Budget Calculations - Essay Example

The above spreadsheet is the explanation of the actual workings, response rate, CPM, Prospects generated, and conversion rates. The spa is expected to have 842 conversions a month from these promotions and an average sales per head of $80 will result in sales of $67360 per month. Response rates have been taken at the following percentages Newspaper ads at 2%, Magazine -1 % and Bill Boards - at .5%, in the Print media.

Non Print:
Radio – 2%
Television – 3%
Internet – 2%.

As the spa is using the pull strategy to market its services, hence it currently will not employ a telesales team to actively push sales over the phone. Besides, the spa does not possess a large calling base. However, with an existing base of 250+ names and numbers, it decides to send direct mail and a 5% conversion on this generates 12 prospects.

Discounts and samples: Discounts and samples given to walk-ins and employees in corporate houses generate a 30% conversion.

Sales Force:  The spa operates only with a minimum of 2 salesmen who make 7 calls a day, 5 days a week with 20 % prospects and a 35% conversion rate on the prospect. A senior member will accompany them to a corporate house once a week and the salesmen will take the lead from there to generate further business.

Events and Sponsors: This will generate an additional 50 % conversion rate considering the celebrities who would visit the spa as this lures people to be present in the spa during their visit to the spa.

CPM and Conversions: The CPM for Television is $6 per 1000 viewers and this would result in $60 for a 30-second commercial aired once. Airing this 4 times a day, 30 days a month costs $7200. The CPM on the internet for Facebook and MySpace is $.5 for 1000 views a day, $50 for 1,00,000 views 30 days a month is $1500. The conversions for all print and non-print prospects have been kept at a conservative 15%. The budget mentioned is both viable and comprehensive and even a 15% slip on the expected rate will leave the spa with a healthy Net Profit Margin.