BSBMKG501- IDENTIFY AND EVALUATE MARKETING OPPORTUNITIES- 2 ass+ presentation

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Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Marking Guide

Assessment Task 2: Evaluate marketing opportunities

Candidate’s name Phone no.

Assessor’s name Phone no.

Assessment site

Assessment date/s Time/s

Outcomes

Did the candidate:

Satisfactory

Yes No

Submit evaluation report for the Board of Directors?

Submit all assessment materials within the required timeframe?

Performance indicators

Did the candidate:

Satisfactory

Yes No

Identify and analyse opportunities in terms of their likely fit with

organisational goals and capabilities?

Report refers to:

● organisational marketing plan, structure, products and services,

for example, report considers opportunities in light of strategic

directions and possible expansion plans

● principles of marketing and the marketing mix, for example,

report refers to:

○ importance of consumer and market data to determine

customer need

○ elements of the marketing mix entailed by each

opportunity: price changes and discounts, product

offering, distribution (online), promotion ($500,000

marketing campaign).

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Did the candidate:

Satisfactory

Yes No

Evaluate each opportunity to determine its impact on current business

and customer base?

Report refers, for example, to:

● effect on sales volume for each opportunity for current or

upcoming financial year

● market share

● profitability (gross and net profit for current or upcoming

financial year; see example calculations that follow this Marking

Guide)

● own brand may be knocked out of contention because of market

need for Australian-made goods.

Report includes at least two instances of numerical analysis or

statistical methods (see example calculations that follow this Marking

Guide), for example:

● profitability index

● least squares to calculate online market

● CVP analysis to calculate gross and net profit.

Use an assessment of external factors, costs, benefits, risks and

opportunities to determine the financial viability of each marketing

opportunity?

Report identifies external factors relevant to each opportunity, for

example:

● Indian law, ATO Regulations and GST implications of importation

relevant to own brand opportunity

● manufacturing, Australian Standards consideration relevant to

own brand opportunity

● 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) Code of Practice, the Free

TV Australia Commercial Television Industry Code of Practice,

and the Australian Guidelines for Electronic Commerce

● Competition and Consumer Act 2010

● privacy laws.

Report should refer to relevant BBQfun policies and procedures.

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Did the candidate:

Satisfactory

Yes No

Report assesses and summarises the viability of each opportunity?

Including:

● major costs associated with each opportunity, for example:

○ reconfiguration (e-commerce)

○ lease (own brand)

○ plant and equipment (own brand).

● potential benefits, for example financial and strategic

● risks associated with each opportunity and (mitigation

strategies), for example:

○ competition from competitors entering e-commerce space

(increased marketing spend, reducing margins)

○ health and safety, insurance risks associated with

manufacturing (training)

○ health and safety risks associated with increased traffic

and distribution (training)

● risks associated with managing change in the organisation

(leadership training for managers).

Determine probable return on investment and potential competitors?

Report determines:

● profitability index (see example calculations that follow this

Marking Guide).

Report determines, for example:

● The Yard: has a limited selection but significant depth. All

Australian made. No significant marketing or promotion. The

price point is high, but the quality of products is quite good. Not

in south-east Queensland. Considering e-commerce options.

Considered potential treat for entering market through

e-commerce because of large distribution network. E-commerce

could mitigate or head-off threat.

● BBQs R Us: Broad range of outdoor lifestyle products including

trinkets and furnishings. Lots of cheap imports. Concentrating

on established markets. Strong in the replacements segment.

One store in Brisbane. Mostly in Melbourne and Adelaide.

Considering e-commerce options.

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Did the candidate:

Satisfactory

Yes No

● Outdoorz: Large operations of only a few stores per city. Mass

markets outdoor lifestyles at good value prices. No imported

goods. Extensive advertising. Low to medium quality. Strong in

the replacement segment rather than new and refurbished

dwellings. Gaining strength in Brisbane market. Considering

e-commerce options. Bargain market opportunity could capture

market share.

Describe and rank marketing opportunities in terms of their viability

and likely contribution to the business?

Report considers financial and non-financial information in arriving

at ranking.

Report determines the following options (see example calculations

that follow this Marking Guide):

1. E-commerce

2. Own brand (but may be considered knocked out because of risk

of offending market)

3. Bargain market.

Identify and document changes needed to current operations to take

advantage of viable marketing opportunities?

Report identifies changes, for example:

● current stores may need to be reconfigured to accommodate

more stock and online order delivery

● office space may need to be reconfigured

● head office could move to the Gold Coast to allow office space in

Brisbane to be used for online sales and customer service

● CRM and ERP software may need to be adapted to

accommodate increased distribution. Extra training may be

needed.

Ensure organisational changes to service an increased or different

customer base include provisions for continued quality of service to

existing customers?

Report identifies:

● service an increased or different customer base., for example:

○ need for trained online customer service staff

○ additional staff required in warehouse

○ sales training required.

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Did the candidate:

Satisfactory

Yes No

● ensure continued quality of service, for example:

○ training required for online customer service staff

○ training required for all staff on importance of service

quality to target market.

Report justifies changes on the basis of maintaining quality.

Estimate resource requirements for changed operations?

Report identifies resource requirements and explains costs (see

example calculations that follow this Marking Guide; operational

costs).

Determine and communicate viability of making changes to current

operations to key stakeholders?

Report is addressed to Board of Directors as per scenario and

conforms to all requirements and specifications.

Document newly identified marketing opportunities and required

changes?

Report uses appropriate language and level of formality to satisfy

needs of readers, for example:

● formal language

● technical vocabulary; no need to define terms such as

‘marketing mix’

● assumed knowledge of organisational policies and marketing

strategies.

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Comments/feedback to participant

Outcome: Successful Unsuccessful

Assessor name:

Assessor signature:

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Example calculations

Least squares: BBQ customers, total market with e-commerce included

Consider historical data plotted in chart:

Year Sales (y) Coded time (x) XY 𝒙𝟐

FY 2012–13 25,000 1 25,000 1

FY 2013–14 35,000 2 70,000 4

FY 2014–15 40,000 3 120,000 9

FY 2015–16 45,000 4 180,000 16

Total ( ∑ ) 145,000 10 395,000 30

Mean (�̅�), (�̅�) 36,250 2.5

𝒃 = ∑ 𝒙𝒚 − 𝒏 �̅� �̅�

∑ 𝒙𝟐 − 𝒏 �̅�𝟐

𝒃 = 𝟑𝟗, 𝟓𝟎𝟎𝟎 − (𝟒 × 𝟐. 𝟓 × 𝟑𝟔, 𝟐𝟓𝟎)

𝟑𝟎 − (𝟒 × 𝟔. 𝟐𝟓)

𝒃 = 𝟑𝟗𝟓, 𝟎𝟎𝟎 − 𝟑𝟔, 𝟐𝟓𝟎𝟎

𝟑𝟎 − 𝟐𝟓

𝒃 = 𝟔, 𝟓𝟎𝟎

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2011 2012 2013 2014 2015 2016

Potential market

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

𝒂 = �̅� − 𝒃𝒙

𝒂 = 𝟑𝟔, 𝟐𝟓𝟎 − (𝟔, 𝟓𝟎𝟎 × 𝟐. 𝟓)

𝒂 = 𝟐𝟎, 𝟎𝟎𝟎

𝒚 = 𝒂 + 𝒃𝒙

𝒚 = 𝟐𝟎, 𝟎𝟎𝟎 + (𝟔, 𝟓𝟎𝟎 × 𝟓)

𝒚 = 𝟓𝟐, 𝟓𝟎𝟎

The estimated number of BBQ customers for 2016–17 is approximately 52,500

(So, therefore, at 24% market share, BBQfun could expect to sell 12, 600 BBQs)

Total market potential

BBQs Outdoor

furniture

BBQ

accessories

Total

FY 2012–13 25,000 13,000 42,000 80,000

FY 2013–14 35,000 15,000 58,000 108,000

FY 2014–15 40,000 17,000 68,000 125,000

FY 2015–16 45,000 19,000 75,000 139,000

FY 2016–17 52,000 21,000 88,000 355,500

With e-commerce

BBQs Outdoor furniture BBQ accessories

1. Number of

buyers

12,600 5,040 21,120

2. Quantity 1 1 3

3. Average price $620 $880 $55

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Gross and net profit for each opportunity

Gross profit = Unit contribution margin X number of units

Own brand E-commerce Bargain market

4. Sales volume

(units)

BBQ: 7,200 BBQ: 12,600 BBQ: 10,000

Furniture: 3,120 Furniture: 5,040 Furniture: 5,000

Accessories:

40,320

Accessories: 63,360 Accessories:

52,500

5. Price BBQ: $600 BBQ: $620 BBQ: $500

Furniture:$850 Furniture: $880 Furniture: $650

Accessories:$50 Accessories:$55 Accessories:$40

6. Unit

contribution

margin

BBQ: $500 BBQ: $300 BBQ: $200

Furniture: $600 Furniture: $420 Furniture: $220

Accessories: $40 Accessories: $20 Accessories: $10

7. Total revenue $8,988,000 $15,732,000 $10,350,000

8. Total gross

profit

FY 2016–17

$7,084,800 $7,164,000 $3,625, 000

9. Total fixed

costs

$6,884,714 $5,484,714 $4,884,714

10. Total net profit

FY 2016–17

$200,086 $1,679,286 ($1,259,714)

Facilitator Guide Marking Guide

BSBMKG501 Identify and evaluate marketing opportunities 1st edition version: 1

Profitability index for each opportunity for 2016–17

Profitability index (PI) =

Present value (PV) of future cash flows

Present value (PV) of initial investment

Own brand E-commerce Bargain

market

Cash flow 2016–17 $7,084,800 $7,164,000 $3,625,000

Opportunity cost 8% 8% 8%

Present value of future cash flows $6,560,000 $6,633,333 $3,356,481

Present value of initial investment $6,884,714 $5,484,714 $4,884,714

Profitability index 0.95 1.2 0.69

Operational costs

Resources Costs

Additional staff $25,000 year average = (4+6) x $25,000= $250,000

Plant and equipment ● Delivery trucks $20,000 x 6 = $120,000

● Forklifts $10,000 x 3 = $30,000

Promotional costs $500,000

Website developers Contractors $2000 x 50 = $100,000

Staff training Online customer service training $3,000 per staff

member = $24,000

Management change

leadership training for store

managers and team leaders

(From the BBQfun simulated business, Chapter 6 –

Description of operations) $3,000 each = 1 Brisbane

store manager, 4 Brisbane team leaders, 1 Gold Coast

store manager and 3 Gold Coast team leaders x

$2,000 = $27,000

Warehouse and office

reconfiguration

$50,000

Total $1,101,000