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This means that the company should think about expanding its activity abroad, and to especially approach the European market.
Threats
Current economic situation - given the circumstances created by the 9/11 terrorist attacks, it is expected that some of the prospective customers looking to buy a boat might postpone their decision until more favorable economic conditions.
Budget Alternatives
Competitive parity method
One of the most important boat manufacturers in the United States and also an important competitor for Craft Marine Corporation is Genmar Holdings, Inc. Genmar's sales are estimated at $1.2 billion. It is estimated that Genmar spends approximately 0.9% of sales on advertising. Given these figures, Craft Marine Corporation's advertising budget should be:
2001 sales - $120.5 million
Estimated growth - 15%
2002 expected sales - $138.5 million
Competitors % of sales - $10 million
Advertising budget = 120.5 X 15% = 138.5 X 10
Amount = $1.2 million
This amount is significantly higher than the usual amount spent by Craft Marine Corporation on advertising budgets the past few years. The company's competitors taken into consideration in this case report significantly higher amount of sales, which means they can afford a bigger budget for advertising.
It is not necessarily a good idea to follow competitors' pattern. This does not necessarily guarantee success.
2. Percent of sales method
In this case, the advertising budget is: 0.265 of sales: $360,000.
This budget is lower that the advertising budgets reported by Craft Marine Corporation in 2001 and 1999. It is recommended that the company invests more in advertising.
3. Objective task method
Objectives
The objectives that must...
The company has set specific objectives to be attained and each of them must be reflected in the advertising budget.
The advertising budget in this case reaches $863,575. The total advertising budget is broken down in the following manner:
Advertising in boating magazines, color pages: $271,560
Advertising in National Geographic, color pages, for 3 months: $470,265
2,000 catalogues: $28,000
25,000 brochures: $93,750
Role of advertising strategies
Boating magazines and boat shows are visited by people who really want to purchase a boat. It would be a very easy and fast method for attracting new customers.
Boat manufacturer catalogues and brochures have a lower rate of success than other advertising methods where the boat industry is concerned. This is probably because these catalogues and brochures are mailed to people that have no interest in purchasing a boat in the first place.
Manufacturer or dealer cooperative advertising is a very useful advertising method. Its success is mainly due to the fact that the manufacturer or the dealer comes into direct contact with people that really want to purchase a boat. This way, the dealer or the manufacturer can convince the client of the advantages provided by the products in case.
Reference List
1. Corporate Marine Corporation Case Study.
Reference List
1. Corporate Marine Corporation Case Study.
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