Magellan Boatworks

Evaluate Magellan’s budgets for advertising/promotion and sales. Are they appropriate
for the marketing task?

Magellan Boat's budget is irrelevant because the turnover ratio has dropped
substantially from 6.8% to 3.7 percent; they must cut costs in certain areas while
increasing spending in others, such as direct mail. Cocktail parties, for example, aren't
profitable because their prices haven't risen in line with inflation. Despite this, their
income creation and actual sales leads have dropped from 6.5 percent to roughly 4%,
indicating that they are losing money. Reduced expenses have led in fewer revenues in
some cases, such as print and new boat exhibits, but they are still profitable. For
example, we cut the cost of a new boat exhibition by 18.2 percent while maintaining
revenue growth.

Magellan Boat's budget is irrelevant; they must cut expenditures in certain areas while
increasing spending in others, such as direct mail, because turnover has decreased
from 6.8% to 3.7 percent. Cocktail parties, for instance, aren't profitable because their
costs haven't risen. Despite this, their income output and actual sales leads have
declined from 6.5 percent to around 4%, indicating that they are not profitable. Reduced
expenses have resulted in lesser profits in some cases, such as print and new boat
exhibits, but they are still profitable. For example, we reduced the cost of a new boat
show by 18.2% while increasing revenue.

Submitted by – Akula Padma Priya, PGP12101, SECB