Case Study: Scenario

APC Sharing is a transportation sharing company based in Australia. It runs electric scooters, electric bikes, and car-sharing systems in various cities in Australia. This company has been operating successfully for the last two years; however, the level of competition in the market is expected to increase due to new entrants in the market.

Therefore, APC Sharing decided to initiate the following

Marketing department: is engaged with social media marketing and, each month,

different sales promotions will be conducted through the social media networks.

Five more employees will be employed and be placed in the marketing department to

support their activities.

The budgets for the marketing department are expected to increase by 20%.

For social media marketing, relevant training will be organized and provided.

Accounting department: aims to support the marketing department by promptly

approving the budgets and reimbursements and analyzing efficiency for the marketing activities.

The marketing department activities were conducted last year as follows:

Marketing Department Activities	2020	2021
Budget ($)	Actual ($)	Budget ($)	Actual ($)
Market Research	$25000	$22000
Owned Media (Homepage, blog)	$32000	$28000
Video Advertising (YouTube)	150000	167000
Social Media Advertisement	N/A	N/A
Creative Design	$60000	$70000
Marketing Software	$120000	$124000
Equipment purchases	$210000	$215000
Staff Salary	$550000	$590000
Staff Training	$85000	$44000
Sales Support tools	$100000	$210000
New Service Development	$120000	$140000
Total	$1452000	$1610000

You have been appointed as the Accounting Department Manager. One of your tasks is to complete the budgeting for the Marketing department for the year 2021.

After the consultation with the Marketing department manager, the marketing department manager has set up the goals and objectives for the marketing department for the year 2021 as follows:

The goal:

Increased the number of service users (customers) by 15% more than the previous year

by the end of 2021.

The objectives:

Gather 1 million followers at the social media network

Increase customer satisfaction rate by 10% - (currently 8.2 out of 10)

Increased the service awareness by the sales promotions (targeted no of visitors in total: 800,000)

Therefore, you and the marketing department manager have decided the following:

Due to the increased number of marketing activities in 2021, the budgets for the

the marketing department will be increased by 20% more than the actual spending in the year 2020.

Marketing software is to be subscribed from the year 2021, and the estimated subscription is $31,000 per annum.

Five full-time staff to be employed, and their total remuneration package, including the superannuation, is $55,000 per employee.

Staff training costs will be increased by $42,000 from the actual spending in 2020 as more training is planned.

The creative design team will have the same budget as the one in 2020.

Social Media Advertising costs are estimated at $250,000.

All other activities are estimated to be the same as the actual spending in 2020.

Budgeting for the marketing department

Question 1:

In the first place, complete the following table provided by the marketing department. You are required to complete the BUDGET column under 2021 only!!! (PC 1.1 PE 1, KE 1, 6.1, 6.3)

Marketing Department Activities	2020	2021
Budget ($)	Actual ($)	Budget ($)	Actual ($)
Market Research	$25000	$22000
Owned Media (Homepage, blog)	$32000	$28000
Video Advertising (YouTube)	150000	167000
Social Media Advertisement	N/A	N/A
Creative Design	$60000	$70000
Marketing Software	$120000	$124000
Equipment purchases	$210000	$215000
Staff Salary	$550000	$590000
Staff Training	$85000	$44000
Sales Support tools	$100000	$210000
New Service Development	$120000	$140000
Total	$1452000	$1610000

Question 3:

You have a meeting with the marketing department. You will need to explain the initial budgeting for the marketing department in 2021, and whether the initial budget exceeds the maximum budget for the department. (PC 1.2)

Question 4:

You are now required to provide recommendations on equipment purchases and sales support tools for the marketing manager. Provide your recommendation on how the marketing manager may reduce the budgets for equipment purchase and sales support tools. (PC 1.3 PE 4)

Question 5:

After the meeting with the marketing manager, the manager informed you of the followings:

All new equipment in 2021 will be on a lease contract.

The Sales Support tools will be only rented out when sales promotion is on.

Due to the changes in the plan, the budget is to be adjusted with the following information:

The lease costs for the new equipment in 2021 is estimated at approx. $8,000 per month.

The expected total rental costs for the sales support tools for the year 2021 are estimated at approx. $88,000 for 20 sales promotion activities.

Required: You are now required to adjust the budget for the marketing department for the year 2021. (PC 1.3 PE 4, KE 5, 6.1, 6.7)

Marketing Department Activities	2020	2021
Budget ($)	Actual ($)	Budget ($)	Actual ($)
Market Research	$25000	$22000
Owned Media (Homepage, blog)	$32000	$28000
Video Advertising (YouTube)	150000	167000
Social Media Advertisement	N/A	N/A
Creative Design	$60000	$70000
Marketing Software	$120000	$124000
Equipment purchases	$210000	$215000
Staff Salary	$550000	$590000
Staff Training	$85000	$44000
Sales Support tools	$100000	$210000
New Service Development	$120000	$140000
Total	$1452000	$1610000

Question 6:

You are now required to analyze the sales volume for the year of 2021. You have the following information and have to use trend analysis to forecast the sales volume in the year of 2021. (PC 1.3, KE 6.1, 6.2, 6.3, 6.7)

Sales Activities	2016	2017	2018	2019	2020	2021
Sharing Services	$380000	$510000	$945000	$1520000	$2150000
Repairing Services	$72000	$112000	$246000	$315000	$465000
Consultation Service	$50000	$88000	$167000	$330000	$520000
Total Sales Volume	$502000	$710000	$1358000	$2165000	$3135000

Question 7:

The CEO called a meeting with you about the marketing department manager and asked if the expected sales budget would cover the increase in the marketing department budgets. (PC 1.4, PE 3 KE 2 KE 6.1, 6.2)

Question 8:

You are required to provide a recommendation to the CEO for the contingency plans when the expected sales volume does not happen. (PC 1.4, PE 3 KE 2 KE 6.1, 6.2)

Question 9: Business report

As the accounting department manager, you are now required to inform the finalized budgets for the senior management. You are required to fill up the following table for the business report. (PC 2.1 PE 2, KE 2, 6, 7)

Business Report
Date
Reported by
Topic	Detailed budgetary information in marketing department
	Expected sales volume for the year of 2021
Financial Plan
How to achieve the financial plan

The budget for the marketing department
Marketing Department Activities	2020	2021
Budget ($)	Actual ($)	Budget ($)	Actual ($)
Market Research	$25000	$22000
Owned Media (Homepage, blog)	$32000	$28000
Video Advertising (YouTube)	150000	167000
Social Media Advertisement	N/A	N/A
Creative Design	$60000	$70000
Marketing Software	$120000	$124000
Equipment purchases	$210000	$215000
Staff Salary	$550000	$590000
Staff Training	$85000	$44000
Sales Support tools	$100000	$210000
New Service Development	$120000	$140000
Total	$1452000	$1610000

The expected sales volume for the year of 2021
Sales Activities	2016	2017	2018	2019	2020	2021
Sharing Services	$380000	$510000	$945000	$1520000	$2150000
Repairing services	$72000	$112000	$246000	$315000	$465000
Consultation Service	$50000	$88000	$167000	$330000	$520000
Total Sales Volume	$502000	$710000	$1358000	$2165000	$3135000

Question 10:

According to the scenario, the marketing department will initiate social media marketing in the year 2021. In addition, from Question 5, the department will rent the sales support tools on an event basis. Recommend how the marketing manager can support their team members. (PC 2.2, PE 5, KE 5