Budget For The Expansion Plan Of Ryanair In Canada Essay

Question:

Discuss about the Budget for the expansion plan of Ryanair in Canada.

Answer:

Budget for the expansion plan of Ryanair in Canada:

Table 1: Monthly budget of Ryanair for the expansion plan

(Source: As created by author)

Particulars

Amount (in $)

Marketing/Promotion:

Marketing agency

2,28,000

Radio advertisement

23,182

Television advertisement

8,90,880

Print advertising

1,80,000

Online advertising

4,93,500

Social media

4,50,000

Web search optimisation

1,39,904

Mailouts

1,07,250

Billboards

1,33,856

Events

2,40,563

Branding and artwork

1,74,000

Merchandising

1,80,000

Catalogues

36,000

Total marketing expenses

3,08,715

Other expenses:

-

Research

6,00,000

Travel

6,41,529

Postage

1,27,337

Administration

2,64,000

Incidentals

90,000

Total other expenses

17,22,866

Total expenses

50,00,000

Table 2: Yearly budget of Ryanair for the expansion plan

(Source: As created by author)

Figure 1: Budget of Ryanair for the expansion plan in Canada

(Source: As created by author)

The above table and figure help in depicting the overall budget based on different marketing items required for the diversification plan. In order to develop this market budget for Ryanair, the following assumptions are made for the items stated below:

Marketing agency:

In order to expand the airline business in Canada, it is necessary for Ryanair to consult with a popular marketing agency in the nation. This is because it would enable the organisation to obtain useful information about the nature of the industry and accordingly, appropriate steps could be undertaken (Alzahrani et al., 2017). The cost of consulting with the marketing agency in Canada varies between $15,000 and $20,000; however, in this case, $19,000 is considered.

Radio advertisement:

This is a useful tool of reaching the targeted audience, which would help in generating awareness about the services of the organisation. The estimated cost of radio advertising is $1,300 for the first three months and it is estimated by 20%, 30% and 40% in the next three quarters.

Television advertisement:

Television commercial is another type of promoting business to draw the attention of the potential customers. In the initial four months, $48,000 would be spent on television commercial, which would be increased by 40% in the next four months and 60% in the later four months. As a result, more customers would able to know about the presence of the airline in Canada (Armstrong et al., 2015).

Print advertising:

Print media advertising is a kind of advertising, which uses physically printed media like newspapers and magazines for reaching the prospective customers. In case of Ryanair, print advertising varies between $12,000 and $18,000 and in this case, the average of $15,000 is taken into consideration.

Online advertising and social media:

These two tools are the most powerful platforms of promoting the business products and services of an organisation, since majority of the individuals in Canada are using internet in the current era (Bly, 2015). For the first half of the year, online advertising is estimated at $35,000; however, it is expected to increase by 30% in the seventh month and it would remain constant for the remaining months of the year. On the other hand, social media expenses are expected to be $30,000 for the initial six months and then it would increase by 50% in the next month, which would remain constant in the next half of the year.

Web search optimisation and mail outs:

Web search optimisation is the technique of influencing the online visibility of a website, while mail outs signify the act of mailing out quantities of circulars, letters and others to a group of individuals at one time (Fine, 2017). The estimated cost of web search optimisation is $9,000 for the first three months and it is estimated by 25%, 30% and 9% in the next three quarters respectively. On the other hand, the cost of mail outs is projected at $6,500 for the initial six months and then it would increase by 75% in the next month, which would remain constant in the next half of the year.

Billboards and events:

Billboards and events are promotional techniques that an organisation adopts for enhancing its popularity in the target market. For billboards, the cost is estimated at $48,000, which would be increased by 20% in the next four months and 30% in the later four months. As a result, more customers would able to know about the presence of the airline in Canada (Gagnon, 2016). On the other hand, the events are organised for informing the customers about the launch of any new product or service. In case of Ryanair, the events would be organised once in every three months in the first year so as to increase its overall sales and profitability level (Lidstone & MacLennan, 2017).

Branding and artwork, merchandising and catalogues:

In case of branding and artwork, the cost in all the months of the first year is projected to remain constant at $14,500. The scenario is identical in case of merchandising and catalogues, as the costs estimated for them are remained to be fixed at $15,000 and $3,000 per month for the overall year. By adding all the above marketing expenses, the total amount to be incurred is obtained as $308,715.

Other expenses:

For ensuring the expansion plan of Ryanair in Canada, it needs to incur other marketing expenses as well. Such expenses take into account research, travel, postage, administration and incidentals (Westwood, 2016). In case of research, the cost would remain constant $50,000 each month for all the parts of the year. The travel-related expense is expected to increase by 10% each month, as more sales representatives would be recruited with the passage of time for increasing its presence in the market. The similar trend is observed in case of postage expense, since it would increase by 5% every month throughout the year. On the other hand, the costs related to administration and incidentals are expected to remain constant throughout the period (Wrenn & Mansfield, 2014). Hence, the total other expenses would stand at $1,722, 866. As a result, the overall cost of the marketing budget is obtained as $5 million for increasing the overall presence in the Canadian market

References:

Alzahrani, A., Corban, H., Hsu, W. C., Chieh Lu, C., & Dai, X. (2017). Samsung Gear VR Marketing Plan.

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.

Bly, R. W. (2015). The Marketing Plan Handbook: Develop Big-Picture Marketing Plans for Pennies on the Dollar. Entrepreneur Press.

Fine, S. H. (2017). Introduction to social marketing. In Marketing the Public Sector (pp. 1-12). Routledge.

Gagnon, E. (2016). The Marketer's Action Plan (MAP): Six Steps to Developing Effective Marketing Plans in B2B Marketing Programs. International Management Review, 12(2), 56.

Lidstone, J., & MacLennan, J. (2017). Marketing planning for the pharmaceutical industry. Routledge.

Westwood, J. (2016). How to write a marketing plan. Kogan Page Publishers.

Wrenn, B., & Mansfield, P. M. (2014). Marketing planning guide. Routledge.

How to cite this essay: