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This sample marketing plan was created with Marketing Plan Pro software.

Our annual marketing budget is $100,000. Sales are anticipated to achieve revenue of $1,172,925. Our marketing expenses will equate to approximately 8.5% of the overall revenue.

Break-even Analysis

Fixed Costs

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Fixed Costs
  
Cost 
Rent or Lease$0
Professional Services$1,000
Payroll$10,000
Interest Payments$2,000
Utilities & Telephone$5,000
Non-discretionary marketing expenses$0
Other$0
Total Fixed Costs$18,000

Break-even Analysis

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Break-even Analysis
  
Monthly Units Break-even145
Monthly Revenue Break-even$19,929
  
Assumptions: 
Average Per-Unit Revenue$137.14
Average Per-Unit Variable Cost$13.28
Estimated Monthly Fixed Cost$18,000

Sales Forecast

Room revenue for this year is based on an average growth rate of 10%. This is based on the number of pre-contracted corporate rooms, and an anticipated return to business levels projected.

Sales Forecast

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Sales Forecast
 FY 2006FY 2007FY 2008
Unit Sales   
Corporate Single1,9252,1182,118
Corporate Double3,6654,0324,032
Corporate Deluxe2,6952,9652,965
Corporate Suite268294294
Total Unit Sales8,5539,4099,408
    
Unit PricesFY 2006FY 2007FY 2008
Corporate Single$95.00$95.00$99.00
Corporate Double$125.00$125.00$135.00
Corporate Deluxe$175.00$175.00$195.00
Corporate Suite$225.00$225.00$240.00
    
Sales   
Corporate Single$182,875$201,210$209,633
Corporate Double$458,125$504,000$544,253
Corporate Deluxe$471,625$518,875$578,175
Corporate Suite$60,300$66,150$70,560
Total Sales$1,172,925$1,290,235$1,402,620
    
Direct Unit CostsFY 2006FY 2007FY 2008
Corporate Single$7.86$11.00$11.00
Corporate Double$13.92$13.50$13.50
Corporate Deluxe$17.50$18.50$18.50
Corporate Suite$0.84$0.00$0.00
    
Direct Cost of Sales   
Corporate Single$15,138$23,298$23,293
Corporate Double$51,033$54,432$54,425
Corporate Deluxe$47,163$54,853$54,853
Corporate Suite$225$0$0
Subtotal Direct Cost of Sales$113,558$132,583$132,570

Expense Forecast

Marketing expenses are projected to be approximately 8.5% of overall annual revenue. The breakdown of expenditures is as follows:

Marketing Expense Budget

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Marketing Expense Budget
 FY 2006FY 2007FY 2008
Print Advertising$10,600$11,600$12,826
Internet Advertising$21,000$23,100$25,410
Public Relations$6,000$6,600$7,260
Other$21,000$23,100$25,410
 ------------------------------------
Total Sales and Marketing Expenses$58,600$64,400$70,906
Percent of Sales5.00%4.99%5.06%

Linking Expenses to Strategy and Tactics

Our marketing expense is structured to reflect the corporate strategy differentiation. Quarterly travel trade publications and interim monthly press ads communicate our message to key corporate clients in one of our most significant target markets. Monthly Internet advertising expenses include banner ads, and strategic links with car hire, airline and destination management companies' websites to drive business to the hotel. Direct mail activity builds our targeted customer database, not only in terms of improving the quality of the data we currently hold, but on increasing the size of the database with prospective customer information. Public relations expenses cover PR events, participation at local functions and sponsorship funds. Overall, the percentage of total revenue required to support the marketing expense is considered a moderate amount.

Contribution Margin

Contribution margins should increase due to:

  • Differentiation/focus strategy increases ability to specialize.
  • Maintenance of expenses within specified levels.
  • Increased efficiency in capacity utilization.
  • Economies of scale due to increased purchasing efficiencies.

Contribution Margin

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Contribution Margin
 FY 2006FY 2007FY 2008
Sales$1,172,925$1,290,235$1,402,620
Direct Cost of Sales$113,558$132,583$132,570
Other Costs of Sales$0$0$0
 ------------------------------------
Total Cost of Sales$113,558$132,583$132,570
    
Gross Margin$1,059,368$1,157,653$1,270,050
Gross Margin %90.32%89.72%90.55%
    
Marketing Expense BudgetFY 2006FY 2007FY 2008
Print Advertising$10,600$11,600$12,826
Internet Advertising$21,000$23,100$25,410
Public Relations$6,000$6,600$7,260
Other$21,000$23,100$25,410
 ------------------------------------
Total Sales and Marketing Expenses$58,600$64,400$70,906
Percent of Sales5.00%4.99%5.06%
    
Contribution Margin$1,000,768$1,093,253$1,199,144
Contribution Margin / Sales85.32%84.73%85.49%

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