FINANCIAL ASPECTS OF MARKETING MANAGEMENT 9. T The annual planning process at Century but produced a number of important marketing initiatives for the next year M notably, company executives had decided to restructure its product team into two separate groups: Office Systems. Angela Blake was assigned responsibility for the Home Systems group, which would market the company's word-processing and software for home and office-at-home use by individuals. Her marketing plan, which included a sales forecast for next year of $25 million, was the result of a detailed market analysis and negotiations with individuals both inside and outside the company. Discussions with the sales director indicated that 40 per cent of the company sales force would be dedicated to selling products of the Home Office Systems group. Sales representatives would receive a 15 percent commission on sales of home office systems. Under the new organizational structure, the Home Office Systems group would be charged with 40 percent of the budgeted sales force expenditure. The sales director's budget for salaries and fringe benefits of the sales force and noncommission selling costs for both the Corporate and Home Office Systems groups was $7.5 million. Office Inc. had been arduous ost Systems 1) Corporate Office Systems and (2) Home Office The advertising and promotion budget contained three elements: trade magazine advertising. cooperative newspaper advertising with Century Office Systems, Inc. dealers, and sales promotion materials including product brochures, technical manuals, catalogs, and point-of- purchase displays. Trade magazine ads and sales promotion materials were to be developed by the company's advertising and public relations agency. Production and media placement costs were budgeted at $300,000. Cooperative advertising cop for both newspaper and radio use had budgeted production costso 100,000. Century Office Systems, Inc's cooperative advertising allowance f company sales to complete policy stated that the company would allocate 5 percent dealers to promote its office systems. Dealers always used their cooperative advertising allowances. Meetings with manufacturing and operations the direct costs of material and labor and direct the Home Office System product line represented 50 accounting department would assign $600,000 in ind overhead (f $300,000 for administrative overhead (clerical, telephone, office l indicated that factory overhead to produce percent of sales. The would asign so.eanuficturin or example, depreciation, maintenance) to the product line and space, and so rth). Freight for the product line would average 8 percent of sales Blake's staff consisted of two Salaries and fringe benefits for Ms. Blake and her staff were $250 product managers and a marketing assistant ,000 per year
