recieved this assignment and we just began this class and have not discussed anything like this. I am so lost! ANY help would be appreciated.... Below is the assignment:
MARKETING MANAGEMENT
CASE: Advanced Furniture Systems
Advanced Furniture Systems (AFS), a division of Conglomerated Diversified Industries (CDI), produces and sells a complete line of office furniture, equipment, and related products. Large organizations represent major potential customers and are served by a direct sales force. A separate sales force calls on a selected group of distributors who serve smaller organizations' needs. AFS sales for the current year are expected to reach $700 million, with direct marketing expenses budgeted for $100 million. Variable contribution margin for the product line is 20%.
CDI has distributed a corporate planning memo suggesting that increases of up to 15% in divisional marketing budgets might be possible in the next fiscal year. Industry s Industry sales for office furniture in the U.S. are expected to reach $13 billion in the current year with a ten percent increase next year*. These gains follow industry sales decreases in three of the preceding four years.
If AFS were to plan for a 15% increase in its marketing budget, what sales volume would be required to cover this increase? What would be the required sales volume, if an additional $3 million in total contribution was required for the 15% budget increase? What impact would these increases have on AFS needed market share?
Prepare a memo to AFS Executive Management Team (EMT) which answers the above questions. Include in this memo your recommendation for next year's marketing budget.
2007-01-31
15:50:32
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4 answers
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asked by
Emily
2