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Confidentiality Agreement

The undersigned reader acknowledges that the information provided by


_________________________ in this marketing plan is confidential; therefore, reader agrees not
to disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this marketing plan is in all


respects confidential in nature, other than information which is in the public domain through other
means and that any disclosure or use of same by reader, may cause serious harm or damage to
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Table Of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1


2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . .3
2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . .3
2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . .3
2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . .5
2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . .6
2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . .6
2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.4 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Target Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . 11

4.0 Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 16
The Metolius Agency

1.0 Executive Summary

The Metolius Agency is a Concord, New Hampshire based graphic design and visual communication
firm. Metolius will be concentrating on corporate identity of established companies. The targeted
customer is a small- to medium-size company that has been established for five to 15 years. The
company has done well with the business so far, but they are in need of a new corporate identity
to allow them to move to the next level.

Metolius will operate out of a small but nice office in the downtown area. For months one through
seven, Kiev Lartiste will be the sole employee. By month seven, Kiev will be hiring an assistant to
help with some of the design work as well as administrative details.

Metolius will offer companies a unique perspective regarding corporate identity and visual
communication. Kiev has a unique background where he has both business skills as well as creative
skills. Most firms come solely from creative backgrounds. While this is useful for the crafting of
logos and other devices of visual communication, it lacks the intuitive business mindset that Kiev
brings to the firm. This competitive edge allows Kiev to bring both an aesthetic design focus as well
as a practical, quantitative mindset that adds value to the service offerings. This is useful since the
clients are more business oriented.

Metolius will rapidly grow its customer base by providing clients with well-priced projects due to
reasonably low overhead, creative, practical designs that add more value than competing graphical
art firms, and superior customer attention. The Metolius Agency will reach profitability by month
nine and will generate $27,347 in profits by year three.

2.0 Situation Analysis

The Metolius Agency is just starting up operations. A well conceived and executed marketing plan
will be critical to the successes and profitability of the business. The agency offers graphic design
and visual communication services to the Concord, New Hampshire market.

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The Metolius Agency

2.1 Market Summary

The Metolius Agency possess good information regarding the market and knows a great deal about
the common attributes of the most prized customers. Metolius will leverage this information to
better understand who is served, their specific needs, and how Metolius can better serve them.

Target Markets

Small companies
Medium companies

Table 2.1: Target Market Forecast

Target Market Forecast


Potential Customers Growth 2002 2003 2004 2005 2006 CAGR
Small companies 8% 234 253 273 295 319 8.05%
Medium companies 7% 145 155 166 178 190 6.99%
Total 7.65% 379 408 439 473 509 7.65%

Page 2
The Metolius Agency

2.1.1 Market Demographics

The profile for Metolius' customer consists of the following geographic, demographic, and behavior
factors:

Geographics

• Our immediate geographic target is the city of Concord, NH with a population of 150,000.
• A 50 mile radius is in need of the services.
• The total targeted number of companies is 379.

Demographics

• Small-sized companies ranging from five to 15 employees.


• Medium-sized companies ranging from 15-40 employees.
• Have been in business for several years.
• Started as a small company with a good idea.
• Ready to take the company to the next level.

Behavior Factors

• Have allowed a lot of the business activities to be done by amateurs or friends of the firm.
• Have expanded at a rate that is hindered by their lack of employment of specific service
professionals.
• Operations have been kept on a somewhat small scale.

2.1.2 Market Needs

The Metolius Agency is providing its customers with a wide selection of graphic design and visual
communication services for established companies wanting to be taken to the next level of
business competition. Metolius seeks to fulfill the following benefits that are important to their
customers.

• Selection: A wide range of graphic design and visual communication services.


• Accessibility: All services will provided from Metolius' centrally-located office space.
• Customer Service: The client will be impressed with the level of attention that they
receive.
• Competitive Pricing: Metolius' price structure will be competitively positioned.

2.1.3 Market Trends

Within the last seven to 10 years, there has been a trend in the industry for the general advertising
agencies to start acting as a full-service agency that not only prepares advertisements, but also
does much of the creative work in-house instead of outsourcing it. This trend toward full-service
agencies has continued. To a large degree it is occurring due to higher profit margins for the
service providers. The Metolius Agency will be bucking the trend and concentrating on their specific
skill set and not offer everything under the sun.

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The Metolius Agency

Market Forecast

600

500

400

300
Small companies
Medium companies
200

100

0
2002 2003 2004 2005 2006

Page 4
The Metolius Agency

2.1.4 Market Growth

In 2000 the graphic design industry reached $812 million dollars. It is forecasted to grow at 5.6%
for the next five years. This growth is attributed to companies' desire to appear professionally to
the public. Another related aspect of this trend is the formation of many small business owners
that took their business, or created a business that uses the Internet and their desire to appear
more corporate or established than they really are. This is accomplished through the use of graphic
design and visual communication services.

Target Market Growth

8.00%

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
Small companies Medium companies

Page 5
The Metolius Agency

2.2 SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company, and
describes the opportunities and threats facing The Metolius Agency.

2.2.1 Strengths

• A unique combination of both creative and business sense.


• An elegant office that gives off the perception of creative, cutting-edge design, implying a
skilled service provider.
• A targeted focus for attracting customers.

2.2.2 Weaknesses

• The struggle to develop awareness related to a start-up company.


• Increasingly limited amount of time for marketing activities as more and more time is
needed to finish projects.
• The struggle to constantly appear on the "cutting edge."

2.2.3 Opportunities

• A growing market that does not seem to be focused on attracting a target customer
segment.
• The ability to generate future business by leveraging the technological advances of the
Internet.
• An industry that is not significantly effected by slumps in the economy.

2.2.4 Threats

• Competition from local competitors who decide to focus on Metolius' targeted segments.
• Significant increase in ease of use of graphic design software that allows individuals to
design their own graphical pieces.
• A shift in local industries that changes the demographics of many of the companies located
in Concord.

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The Metolius Agency

2.3 Competition

The following are examples of the different types of competitors.

• Large Advertising Agencies: Over the years these firms have increased their number of
service offerings from selling media forms of advertising, to a more full-service company
that develops creative work in-house, working with companies to develop corporate
identity, etc.

• Freelance Designers: These competitors are similar to Kiev because they are typically a
one person operation, usually operating out of their own home. Often the freelance
designers are just getting into the business and are trying to get experience, or they have
left a firm in search of a more flexible lifestyle. Some freelance designers are well
experienced and can offer the same professional level of quality the large agencies offer.

• Kinko's: While Kinko's is not a true competitor, they are a substitute competitor that
should be mentioned. While Kinko's does not have a true creative department, for some of
the larger accounts, they will offer free creative services as a value-added feature to the
larger customer. These services are typically provided by an employee who has
introductory or intermediate skills using graphic design software such as Quark or
Freehand, and in a small amount of time can generate creative images for the client. These
services are typically not billed, just a value-added benefit for using Kinko's. While the price
is quite good, the customer must recognize the fact that these services are not on par with
a professional agency.

Table 2.3: Growth and Share Analysis

Growth and Share


Competitor Price Growth Rate Market Share
Competitor $0 0% 0%
Competitor $0 0% 0%
Competitor $0 0% 0%
Competitor $0 0% 0%
Competitor $0 0% 0%
Other $0 0% 0%

Average $0.00 0.00% 0.00%


Total $0.00 0.00% 0.00%

2.4 Services

The Metolius Agency provides graphic design and visual communication services to already
established, primarily Concord-based companies. Some of the services offered are corporate
identity, marques, logos, branding, and packaging.

The pricing of the projects is typically estimated as a project-based cost. The project cost will be
estimated by the approximate number of hours needed to complete the project. Generally, Kiev
will be charging $75 an hour for his services.

The majority of services will be provided at The Metolius Agency's office space. This office will be
designed to appear sophisticated, modern, practical, and sleek. This is very important because the
office of a graphic designer is a piece of their portfolio and reflects their work product. Therefore, a
decent amount of money will be used to develop a proper appearing business office.

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The Metolius Agency

2.5 Keys to Success

The keys to success are:

• Professionalism.
• Creativity.
• Practical insight.
• Enjoyment of the experience.

2.6 Critical Issues

The Metolius Agency is still in the speculative stage as a service provider. It plans to take a modest
strategy toward project acquisition, not accepting projects by virtue of increasing revenue, but
accepting new projects conditionally on the fact that sufficient resources can be committed
ensuring complete customer satisfaction.

3.0 Marketing Strategy

The market segments will be targeted in a number of different ways. It must be noted that a
graphics firm generates visibility and sales not through advertising, but through networking and
client referrals. The marketing strategy will therefore consist of the following methods:

• Networking: The networking will be based on leveraging Kiev's personal and professional
relationships that he has developed after spending years in the industry. Ways of
networking include sending out notecards to all acquaintances announcing the opening of
The Metolius Agency, and periodically meeting with people to catch up. This also means
finding out who this person knows within some of the target companies that Metolius will
likely try to turn into customers.

• Client Referral: A lot of business is derived through referrals. Some of the referrals will
come through the Chamber of Commerce, some of the referrals will come from customers.
Recognizing that referrals will be a good source of new customers, Kiev will be in constant
contact with the Chamber. Kiev will investigate the possibility of doing a small project pro
bono for the Chamber. This will be done to let the Chamber view an example of The
Metolius Agency's work. It will also provide a reason for the Chamber to recommend The
Metolius Agency. Kiev will work very hard to satisfy all of his customers. By making sure
that he exceeds their expectations, he will increase the likelihood that he will receive
referrals from satisfied customers.

• Targeted Customer Acquisition: This is the research and strategic formulation to attract
a chosen company to become a customer. Kiev will put together a list of 20-30 companies
that would be excellent customers. Once these companies have been identified, Kiev will
devise a strategy to target these companies as customers by initially determining what
value Metolius can offer the company. Once this has been established, Kiev will figure out
who of his acquaintances might now someone from the targeted company and try to
arrange some sort of meeting. Eventually, the goal is to be able to meet with the decision
maker of the company and present them with a portfolio of Kiev's past work as well as the
proposed value Kiev can offer this company.

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The Metolius Agency

3.1 Mission

The Metolius Agency's mission is to provide the customer with creative and practical graphic design
work and visual communication services. We exist to attract and maintain customers. When we
adhere to this maxim, everything else will fall into place. Our services will exceed the expectations
of our customers.

3.2 Marketing Objectives

• Increase visibility, evidenced by an increase in unsolicited requests for service.


• After year one, generate at least 30% of new business each quarter from referrals.
• Continually strengthen Metolius' brand equity, evidenced by informal polling during
networking activities.

3.3 Financial Objectives

• Maintain positive, steady, growth each month.


• Reach profitability by the end of year one.
• Continue to decrease the variable costs associated with serving a project.

3.4 Target Markets

The Metolius Agency has two distinct customer groups which they will concentrate on:

• Small-size companies: typically five to 15 employees.


• Medium-size companies: 15-40 employees.

These companies started with a great idea that they have parlayed into an established company.
They are now ready to step up to the plate and seriously compete in their market place. These
companies, whether small- or medium-size companies, started with a valuable concept and have
leveraged their original grassroots visual communication elements a bit too long to be competitive
now. More than likely, they had Aunt Betty design the original logo and branding material. Now
that they have matured into a larger company, it is not really appropriate or competitive to be
relying on the original grassroots corporate identity. These companies are in need of the same
level of quality as their competitors and are in need of a professional firm to take them to that next
level.

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The Metolius Agency

3.5 Positioning

The Metolius Agency will position itself as a focused, innovative graphic design and visual
communication firm targeting established companies that are ready to advance to the next level of
business. Metolius will achieve this positioning by leveraging their competitive edges:

• The Metolius Agency's competitive edge is based on Kiev's diverse background of business
and creativity. Typically, most creative agencies are staffed by right brain creative types.
These people are extremely aesthetically orientated. While this is certainly an asset in the
field of graphic design, it can be limiting because the primary audience of their work are not
right brainers. It might not "hit home" with non-creative types which make up a large
portion in the business world.

• Kiev's background is based in both aesthetic and practical business. While Kiev always had
a creative streak that he would use, his education was business orientated. This was quite
useful because it provided Kiev with a unique insight to business, marketing metrics, and
the importance of Return on Investment in regards to marketing. This competitive edge
allows The Metolius Agency to offer similar creative services other firms can offer, but also
provide a unique business perspective that should be required by all creative firms because
of the true value it adds.

3.6 Strategy Pyramids

The single objective is to position The Metolius Agency as a creative, unconventional, and
innovative graphic design and visual communication firm in the Concord, NH area. The marketing
strategy will be used to first develop customer awareness of Metolius regarding services offered,
then develop a strong customer base, and finally work toward building customer loyalty and
referrals.

The positioning will be accomplished through multiple strategies:

• Networking: Leveraging relationships to build new relationships within Concord's relatively


intimate community.

• Targeted Customer Acquisition: The first step of this process is to target who the ideal
customer is, determine how Metolius can offer them value, and then network with the
decision maker at that company.

• Website: Inclusion of the Internet address in all materials that The Metolius Agency
releases, as well as submissions to popular websites. Submissions to search engines is an
art in itself as different search engines work in different ways, so a customized submission
is most effective. Kiev is outsourcing the website design and search engine placement to
the specialists at 1st-At-The-Top.com Internet & E-commerce Consulting Services, www.1st-
At-The-Top.com.

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The Metolius Agency

3.7 Marketing Mix

The Metolius Agency's marketing mix is comprised of the following approaches to pricing,
distribution, advertising and promotion, and customer service.

• Pricing: Metolius' pricing scheme will be based on a per project fee that will be calculated
by forecasting the number of hours required to complete the project as well as any
additional resources needed.

• Distribution: Metolius' services will be distributed either from the centrally located office or
through transfer of the work product via the Internet.

• Advertising and Promotion: The most successful activities will be a comprehensive


networking campaign, as well as a targeted customer acquisition system.

• Customer Service: Obsessive customer service is the mantra. No expenses will be spared
to achieve total customer satisfaction. This strategy will be pursued, regardless of the
impact of short-term profits. The reason for this is that total customer satisfaction is the
recognition that this will ensure long-term profitability.

3.8 Marketing Research

During the initial phases of the marketing plan development, several focus groups were held to
gain insight into the targeted companies. These focus groups provided useful insight to the
prospective customers and their decision-making process.

Another form of marketing research is a collaborative research project completed on behalf of


three graduate students from the University of New Hampshire. The students produced a report
that was very insightful. Because the students received both class credit as well as practical
experience, they had an incentive to produce a work product that was valuable to the Metolius
Agency.

4.0 Financials

This section will offer a financial overview of The Metolius Agency and how it relates to the
marketing activities. Metolius will address break-even analysis, sales forecasts, expense forecasts,
and how they link to the marketing strategy.

4.1 Break-even Analysis

The break-even analysis indicates that $8,760 is required in monthly revenue to reach the break-
even point.

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The Metolius Agency

Break-even Analysis

$10,000

$5,000

$0

($5,000)

($10,000)
$0 $3,000 $6,000 $9,000 $12,000 $15,000

Monthly break-even point

Break-even point = where line intersects with 0

Table 4.1: Break-even Analysis

Break-even Analysis:
Monthly Units Break-even 12
Monthly Sales Break-even $8,760

Assumptions:
Average Per-Unit Revenue $750.00
Average Per-Unit Variable Cost $22.50
Estimated Monthly Fixed Cost $8,497

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The Metolius Agency

4.2 Sales Forecast

The first month of operation will be used to set up the office and establish the online presence.
Some of the time will be working with the interior designers to create a modern looking office
space.

Months two through four will be somewhat slow as Kiev is developing clients. He is forecasting to
take on some smaller projects. By month five Metolius will have developed larger projects and will
continue to grow steadily.

Monthly Sales Forecast

$12,000

$10,000

$8,000

$6,000 Small companies


Medium companies
$4,000

$2,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table 4.2: Sales Forecast

Sales Forecast
Sales 2002 2003 2004
Small companies $30,760 $50,697 $58,849
Medium companies $40,058 $74,554 $86,543
Total Sales $70,818 $125,251 $145,392

Direct Cost of Sales 2002 2003 2004


Small companies $923 $1,521 $1,765
Medium companies $1,202 $2,237 $2,596
Subtotal Cost of Sales $2,125 $3,758 $4,362

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The Metolius Agency

4.3 Expense Forecast

The marketing expenses will be budgeted throughout the year to reflect efforts to build general
visibility, as well as to attract specific projects. The attraction of specific projects will happen
several times during the year and will reflect a time when Metolius is able to take on additional
larger projects.

Monthly Expense Budget

$700

$600

$500

$400 Networking expenses


$300 Targeted customer acquisition expenses

$200 Website development

$100

$0

Table 4.3: Marketing Expense Budget

Marketing Expense Budget 2002 2003 2004


Networking expenses $2,400 $2,800 $3,500
Targeted customer acquisition expenses $400 $1,000 $2,000
Website development $1,325 $825 $825
------------ ------------ ------------
Total Sales and Marketing Expenses $4,125 $4,625 $6,325
Percent of Sales 5.82% 3.69% 4.35%
Contribution Margin $64,568 $116,868 $134,705
Contribution Margin / Sales 91.18% 93.31% 92.65%

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The Metolius Agency

5.0 Controls

The purpose Metolius' marketing plan is to serve as a guide to the organization. The following
areas will be monitored to gauge performance:

• Revenue: monthly and annual.


• Expenses: monthly and annual.
• Repeat business.
• Customer service.

5.1 Implementation

The following milestones identify the key marketing programs. It is important to accomplish each
one on time and on budget.

Milestones

Marketing plan completion

Website development

First large project

Profitability

Jan Jan Jan Jan Jan Jan Jan Jan

Table 5.1: Milestones

Milestones Plan
Milestone Start Date End Date Budget Manager Department
Marketing plan completion 1/1/02 2/1/02 $0 Kiev
Website development 1/1/02 2/1/02 $500 outsourced
First large project 1/1/02 6/31/02 Kiev
Profitability 1/1/02 1/2/00 Kiev
Totals $500

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The Metolius Agency

5.2 Marketing Organization

Kiev Lartiste is responsible for all marketing activities.

5.3 Contingency Planning

Difficulties and Risks

• Problems generating visibility.


• Difficulty landing larger projects that will significantly aid cash flow.
• The refocus of a competitor on the same target segment that Metolius has chosen.

Worst Case Risks May Include

• The inability to reach profitability.


• Having to liquidate equipment to cover liabilities.

Page 16
Appendix: The Metolius Agency
Table 4.2 Sales Forecast

Sales Forecast Plan


Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Small companies $0 $600 $1,500 $1,360 $2,296 $2,811 $3,240 $3,240 $3,558 $3,769 $3,936 $4,450
Medium companies $0 $0 $0 $2,000 $2,676 $3,376 $4,134 $4,765 $5,232 $5,543 $5,788 $6,544
Total Sales $0 $600 $1,500 $3,360 $4,972 $6,187 $7,374 $8,005 $8,790 $9,312 $9,724 $10,994

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Small companies $0 $18 $45 $41 $69 $84 $97 $97 $107 $113 $118 $133
Medium companies $0 $0 $0 $60 $80 $101 $124 $143 $157 $166 $174 $196
Subtotal Cost of Sales $0 $18 $45 $101 $149 $186 $221 $240 $264 $279 $292 $330

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Appendix: The Metolius Agency
Table 4.3 Marketing Expense Budget

Marketing Expense Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Networking expenses $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Targeted customer acquisition expenses $0 $0 $0 $100 $100 $0 $0 $100 $100 $0 $0 $0
Website development $500 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Sales and Marketing Expenses $700 $275 $275 $375 $375 $275 $275 $375 $375 $275 $275 $275
Percent of Sales 0.00% 45.83% 18.33% 11.16% 7.54% 4.44% 3.73% 4.68% 4.27% 2.95% 2.83% 2.50%
Contribution Margin ($700) $307 $1,180 $2,884 $4,448 $5,727 $6,878 $7,390 $8,151 $8,758 $9,157 $10,389
Contribution Margin / Sales 0.00% 51.17% 78.67% 85.84% 89.46% 92.56% 93.27% 92.32% 92.73% 94.05% 94.17% 94.50%

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