Introduction and description of project background
A business case refers to the first expected outcome in the life cycle of IT projects. It provides an assessment of the feasibility, value, benefits, risks and costs of various suggested options or alternatives to an organization (Panwar et al., 2017). The report shall present a business case based on Port Fairy Caravan and Camping Park. The company, which is based in Port Fairy, offers customers a wide range of options for accommodation such as non-motorized and motorized camping sites, recently renovated cabins consisting of a toilet, lounge, and kitchenette and shower room. The project undertaken by South West Advertising Inc. aims to analyze as well as evaluate the company’s e-marketing strategies by reviewing all e-marketing channels such as online newsletters, advertising on Google and social media, posts on community website and community notice boards.
Description of project objectives (including link to organisational mission statement)
The purpose of the project based on Port Fairy Caravan and Camping Park is to analyse the e-marketing strategy of the company. The evaluation must also provide details of a review and investigation into all e-marketing channels used by the company at present such as online newsletters, social media advertising, mobile app, and other platforms (Chaffey & Ellis-Chadwick, 2019). Furthermore, the project shall also provide a list of changes that are to be made in the bookings, ROI and comparison with key competitors, for each of the e-marketing channel used by Port Fairy Caravan Park. The director of Port Fairy, Jerry Maguire has realized that the digital marketing strategy of the company is extremely costly and therefore wants to review it for determining the most cost-friendly yet impactful approach to promote the park’s facilities on various online advertising platforms. This is even more urgent for the company since its mission is to be the leading camping and holiday spot for tourists at an affordable price range for packages (portfairycaravanparks.com, 2020).
Description of the current situation (including a SWOT analysis)
A SWOT analysis of the present situation at Port Fairy with regard to its e-marketing strategy review project has been presented.
Strengths
|
Weaknesses
|
Opportunities
|
Threats
|
Table 1: SWOT analysis of the current situation
Outline of problem/opportunity statement
The project aims to come up with the most cost-effective strategy for digital marketing for the company, Port Fairy that shall help the company’s director, Jerry Maguire to invest more on improving and optimising the facilities provided by the parks. The biggest expected opportunity of the project is that it shall lead to a minimum of 25% ROI. However, the company that has been chosen by him for this purpose, South West primarily focuses on evaluating digital marketing strategies for sports enterprises. The CEO of the firm wants to change the currently followed strategy by tapping into other markets such as reviewing digital marketing strategy of a caravanning company, Port Fairy. This move is expected to create numerous problems for the company due to the vast difference in the education and skills of the employees working on sporting companies and camping marketing projects.
Details of critical assumptions and constraints
With this project, it is assumed that the current costs and expenses involved in the online marketing strategy of Port Fairy would be minimised and the most impactful approach to market the services and facilities of the parks would be formulated. Furthermore, it is also assumed that the project shall earn a minimum of 25% ROI. Moreover, since the project evaluation will require data to support the findings and discussion made while reviewing the existing digital marketing strategies of the firm, it is assumed that this data and information would be gained through conducting surveys of the vacationers and reviewing and evaluating the financial records and bookings (Das et al., 2019).
However, the challenges are in the form of resistance from employees of South West Advertising who may not agree with the CEO, Bob Sugar’s interest in increasing the profits of the company by tapping into new markets, such as caravanning and camping marketing projects. Furthermore, the stark differences in the skill sets of the employees working on evaluating sporting firms’ e-marketing strategies and those of camping ones shall also constitute major constraints.
An analysis of options and recommendations
In order to overcome the potential challenges discussed above, South West Advertising would be required to gain significant knowledge and information about the current e-marketing channels used by Port Fairy. This is to be followed by convincing the employees who are unwilling to welcome the change in strategy to look at the finer sides of the new strategy in terms of the profits that shall be earned if the projects are successful (Noe & Kodwani, 2018). Lastly, training programs and workshops can be organised in order to train the employees to develop the basic skills that are required by them for evaluating camping e-marketing channels and strategies.
financial analysis (npv, roi and payback figures)
NPV
| Discount rate | 9.00% | ||||||
| Assume the project is completed in Year 0 | Year | ||||||
| 0 | 1 | 2 | 3 | Total | |||
| Costs | 90,000 | 20,000 | 20,000 | 15,000 | |||
| Discount factor | 1.00 | 0.92 | 0.84 | 0.77 | |||
| Discounted costs | 90,000 | 18,400 | 16,800 | 11,550 | 1,36,750 | ||
| Benefits | 0 | 90,000 | 1,30,000 | 1,50,000 | |||
| Discount factor | 1.00 | 0.92 | 0.84 | 0.77 | |||
| Discounted benefits | 0 | 82,800 | 1,09,200 | 1,15,500 | 3,07,500 | ||
| Discounted benefits – costs | (90,000) | 64,400 | 92,400 | 1,03,950 |
|
NPV | |
| Cumulative benefits – costs | (90,000) |
|
66,800 | 1,70,750 | |||
|
125% | ||||||
| Payback in Year 1 | |||||||
Table 1: NPV
IRR
| Present value | |||||
| Year | Cost | Benefit | Net cash flow | at DF 80% | at DF 90% |
| 0 | -90000 | 0 | -90000 | -90000 | -90000 |
| 1 | -20000 | 90000 | 70000 | 38888.5 | 36842.4 |
| 2 | -20000 | 130000 | 110000 | 33950.4 | 30471.1 |
| 3 | -15000 | 150000 | 135000 | 23148.45 | 19681.65 |
| Total | 5987.35 | -3004.85 | |||
Table 2: IRR
IRR = 80+(90-80)*5987.35/{5987.35-(-3004.85)}
= 86.66%
Payback Period
| Year | Costs | Benefits | Cum Costs | Cum Benefits |
| 0 | 90,000 | 0 | 90,000 | 0 |
| 1 | 20,000 | 90,000 | 1,10,000 | 90,000 |
| 2 | 20,000 | 1,30,000 | 1,30,000 | 2,20,000 |
| 3 | 15,000 | 1,50,000 | 1,45,000 | 3,70,000 |
Table 3: Payback period
Figure 1: Payback period
From the above calculation it can be seen that NPV of project in three months is going to be $170,750. IRR of the project is expected to be 86.66%. Payback period is going to 1 year. All these results are showing positive outcomes of new project. These tools are used to identify potential risks and profitability of project before making investment.
NPV shows the current value of money after a specific time. NPV is reflecting that value of project after 3 months would be $170,750. It means value is going to increase from $144,540 to $170,750. IRR shows the earnings from an investment on periodic basis. Rate of return is 86.66% it means project would earn $ 86.66 on spending each $100. Payback period shows the duration in which cost of an investment project would be recovered. Company can invest in new project as it would be profitable for company in future.
Preliminary project requirements (project preliminary scope)
| Project Justification | Project is created to analyse Port fairy Carvan and Camping park pty Ltd e marketing strategy. It will also include the evaluation of all e marketing channels. |
| Product Description | It would include evaluation of e marketing strategy, examination of current target market through survey and research. Information would be gathered from customers, market and employees about the new strategy. |
| Project deliverables | a) Digital marketing strategy evaluation b) Research about customer profile C) analysis of digital channel d) evaluation of messaging strategy e) review of marketing ROI and recommendation for new e marketing strategy. |
| Project objective | Objective is to evaluate e commerce strategy for Port fairy Carvan and identify ROI, NPV and PP. Motive is to complete project on time within budget. |
| Out of scope items | Internal information of company such as traditional marketing and finances are out of scope items. All employees cannot be surveyed. |
| Cost objective | Total estimated cost for project has been kept
$145,000. Therefore, activities would be allocated as per the budgeted amount. |
| Schedule objective | Three months or 12 weeks have been considered for the completion of project. |
| Acceptance criteria | Acceptance criteria reflects that timely completion and within budget. Payment rate would be $80 p/hr for project team and consultant pay is negotiable. |
| Constraints | Disagreement among several employees with company’s new strategy. Consultant pay rates are also negotiable and it can be constraint. |
| Assumptions | Initial investment in project is assumed to be
$90,000 and ROI is assumed to be 125%. |
Table 4: preliminary project requirements
Budget estimate (cost model and baseline)
| # Units/Hrs. | Cost/Unit/Hr. | Subtotals | WBS Level 1 Totals | % of Total | |
| WBS Items | |||||
| 1. Project Management | $21,100 | 15% | |||
| 1.1 Project manager | 100 | $50 | $5,000 | ||
| 1.2 Project team members | 100 | $80 | $8,000 | ||
| Contractors (10% of software development and testing) | $8,100 | ||||
| 2. Hardware | $9,000 | 6% | |||
| 2.1 Handheld devices | 60 | $100 | $6,000 | ||
| 2.2 Servers | 3 | $1,000 | $3,000 | ||
| 3. Software | $73,750 | 51% | |||
| 3.1 Licensed software | 25 | $150 | $3,750 | ||
| 3.2 Software development* | $70,000 | ||||
| 4. Testing (10% of total hardware and software costs) | $11,000 | $11,000 | 8% | ||
| 5. Training and Support | $16,550 | 11% | |||
| 5.1 Trainee cost | 60 | $120 | $7,200 | ||
| 5.2 Travel cost | 9 | $150 | $1,350 | ||
| 5.3 Project team members | 100 | $80 | $8,000 | ||
| 6. Reserves (10% of total estimate) | $13,140 | $13,140 | 9% | ||
| Total project cost estimate | $1,44,540 |
Table 5: Budget
Budget of 145,000 has been decided for the project therefore all the necessary costs are allocated as per the current rates and resource requirement in budget. 10% of total estimate has would be kept as contingency reserve. Project management, hardware, software and training costs are included in budget. Major part of budget is going to be spent on hardware as it is crucial part of project.
Schedule estimate (including work breakdown structure level 3)
Scheduled estimates of all project activities have been shown in the image. Each activity has been allocated with estimated time for accomplishment. This organisation would help in managing work as schedule and priority. E marketing evaluation strategy is prime activity and other activities are supporting activities. These support activities would take place one after another.
List of potential risks
Potential risks are mentioned below:
- Resistance from employees to adapt with new policy. Lack of employee support can lead to failure of project.
- Changing market environment can affect the strategies and evaluation.
- Incorrect assumptions can affect the effectiveness of project.
- Increasing cost of resources can increase the budgeted cost for project.
- It is a time consuming process therefore it can take more than three months to complete the project.
- Conflicts regarding pay rates can be arise.
Conclusion
Thus it can be concluded that e commerce strategies in business help in reaching large number of customers in low cost. However these e commerce projects require time and cost. It can be seen from the case study that a project for evaluation of e marketing strategy has been proposed. There are various functions involved with project as budget, risks, financial analysis and recommendations. Return from investment in new project is expected to profitable and all the activities are allocated as per budget and time. There are risks of conflicts and disagreement during the project. It is also seen that activities are divided in work breakdown structure level three.
References
Chaffey, D., & Ellis-Chadwick, F. (2019). Digital marketing. Pearson UK.
Das, H. R., Rao, P. S., Kamath, G. B., & Prasad, H. S. (2019). Influence of E-Marketing Strategy on Customer Satisfaction. International Journal of Innovative Technology and Exploring Engineering, 8(9 Special Issue 3), 289-292.
Hollensen, S. (2019). Marketing management: A relationship approach. Pearson Education.
Noe, R. A., & Kodwani, A. D. (2018). Employee Training and Development, 7e. McGraw-Hill Education.
Panwar, R., Nybakk, E., Hansen, E., & Pinkse, J. (2017). Does the business case matter? The effect of a perceived business case on small firms’ social engagement. Journal of Business Ethics, 144(3), 597-608.
portfairycaravanparks.com. (2020). Port Fairy Caravan Parks | Quality Holiday Accommodation & Camping. Retrieved 4 May 2020, from https://www.portfairycaravanparks.com/
Wirtz, J., & Zeithaml, V. (2018). Cost-effective service excellence. Journal of the Academy of Marketing Science, 46(1), 59-80.