1. 6. Budgeting and Expenses
Software 7,000.00$
Harware 1,400.00$
Educational materials 2,000.00$
Training 2,000.00$
Site Operation 50,000.00$
Maintenance Costs 50,000.00$
30,000.00$
400,000.00$
Domain Name 10,000.00$
Outside Consultants 30,000.00$
Advertising 200,000.00$
Public Relation 100,000.00$
Online Promotion 200,000.00$
Search Engine Optimization 200,000.00$
Online Directory 10,000.00$
Prize 10,000.00$
Staff 800,000.00$
2,102,400.00$
Marketing Communication
Social Media Communication
Total
Marketing Budget and Expenses
Technology Cost
Site Design Budget
Salaries
Other Site Development Expenses
2. Marketing Investment: 2,102,400.00$ a
# of new cutomers 50000 b
Value of each new customer (CLV) 145.00$ c
Projected Profit 7,250,000.00$ d
ROI (D-A)/A 245%
Customer Lifetime Value
(As long as your CLV is based on profit, not gross revenue)
8. Lessons that you learned from the project
Estee Laudercompanyhas imrpovedinthe abilitytodominate the cosmetcindustry. Withthe shiftof
consumersgoingfroma purchasingtheiritemsfromabrick andmotor storesto makingan online
purchase Estee Lauderisthe leaderinadjustingtothisshift. Withsocial mediaprofiles,YouTube videos,
blogs,are all part of the internetcampaignthatgenerate brandawarenessandreinforcesacustomers
relationshipwith the company. Inadditionthe revenue andclicktrafficgenerratedfromthe marketing
campaignwil increase revenue thatwill have areturnonthe investment. Witha initial investmentof
2.1 millionthe companycanreceive awill onlyneed50,000 new customerseveryyearandtheywill
receive areturnon the investover245% if each of the customersonlyspend145 a year.
Four Year Profit Projection
Estee Lauder
2014 % 2015 % 2016 % 2017 %
Sales 10,968,800$ 100.00% 12,175,000$ 100.00% 14,311,800$ 100.00% 17,993,600$ 100.00%
Cost/ Goods Sold
(COGS) 2,158,200 29.68% 2,158,200 17.73% 2,500,000 17.47% 2,750,000 15.28%
Gross Profit 8,810,600$ 80.32% 10,016,800$ 82.27% 11,811,800$ 82.53% 15,243,600$ 84.72%
Operating
Expenses
Salary (Office &
Overhead) 6,985,900$ 63.69% 7,200,000$ 59.14% 7,400,000$ 51.71% 7,900,000$ 43.90%
Taxes (real estate
etc.) 567,700 5.18% 620,000 5.09% 660,000 4.61% 700,000 3.89%
Interest 50,800 0.46% 60,000 0.49% 70,000 0.49% 90,000 0.50%
Total Expenses 7,604,400$ 69.33% 7,880,000$ 64.72% 8,130,000$ 56.81% 8,690,000$ 48.29%
Net Profit Before
Tax 1,206,200 2,136,800 3,681,800 6,553,600
Income Taxes - - - -
Net Profit After Tax 1,206,200 2,136,800 3,681,800 6,553,600
Owner Draw/
Dividends - - - -
Adj. to Retained
Earnings 1,206,200$ 2,136,800$ 3,681,800$ 6,553,600$
