Explanation/Reference:
Business Case Theme
Testlet 1
Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out more about the
requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to the increased
marketing activities of its competitors. 10% of customers have not re-ordered in this financial year and staff
morale is poor. A number of skilled staff have left as a result and replacement staff have not been recruited
due to the reduced operation. If the project is successful, a recruitment campaign will be required to fill the
existing staff vacancies and there may be a requirement for additional staff. Operational costs are likely to
increase because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an average profit of
E2k. The Marketing department believes that sending a promotional calendar to our current and prospective
customers would increase orders by at least 10% with a minimum of 10 further orders from the list of
prospective customers within 12 months from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She believes that the
effect of a good company image portrayed by a successful calendar would last into a second year. She has
forecast the same increase in orders for a second year and predicts that the annual employee satisfaction
survey will show a measurable improvement in staff morale.
A number of alternatives were explored, including:
* 20% discount for all repeat customers - not cost-effective and very short term
* A promotional calendar as a free Christmas gift - would target current and prospective customers and the
benefits would last into a second year
* A series of television and press advertisements was too expensive
* A direct mail shot to all customers - benefit would be short term
* Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not increase their
marketing activity. Whilst the Marketing department wants a very high quality, glossy product, the project
management team must be aware of the cost this will incur.
Using the Project Scenario and the additional Information provided for this question In the Scenario
Booklet, answer the following question.

Explanation/Reference: