PART 2: Question 11 (marketing arithmetic: 10%)

The organizers of the annual Osheaga Music Festival are seeking ways of increasing annual attendance at the Montreal-based festival. The 3-day late summer event has attracted an average of 50,000 attendees daily in recent years, and the organizers are seeking ways for attendance to approach the 65,000 person capacity of the Ile Ste Helene venue. The average ticket price for the event is $135 (Cdn.), with a 55% contribution margin.

One idea under consideration is to organize a 2-kilometer parade along Ste. Catherine Street on the day before the traditional opening day. The organizers believe that with some additional monetary and expense coverage incentive - they can get many of the scheduled performing artists to come early and participate in the parade happening. The new investment required for this parade will be $1,750,000, but the prediction is that capacity will approach 60,000 daily if this parade is held.

Questions: 11.A) What is the ROMI for this potential event (i.e. the parade)? (8 points) 11.B) If the total fixed cost of the event amounts to $4,500,000, how many daily attendees (on average) would they need to host in order to achieve $25,000,000 in revenue? (2 points)