theol
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- Jul 12, 2020
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The following appeared in an e-mail sent by the marketing director of the Classical Shakespeare Theatre of Bardville.
"Over the past ten years, there has been a 20 percent decline in the size of the average audience at Classical Shakespeare Theatre productions. In spite of increased advertising, we are attracting fewer and fewer people to our shows, causing our profits to decrease significantly. We must take action to attract new audience members. The best way to do so is by instituting a 'Shakespeare in the Park' program this summer. Two years ago the nearby Avon Repertory Company started a 'Free Plays in the Park' program, and its profits have increased 10 percent since then. If we start a 'Shakespeare in the Park' program, we can predict that our profits will increase, too."
Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation.
Essay:
The marketing director argues that the theatre should introduce a new program known as Shakespeare in the Park (SP) in order to increase the profits. We need to ask a number of questions about the causes of decline of profits for CS Theatre, the reasons why Avons profits increased and whether the proposed program will be as successful as the program of Avon.
To begin with, we are not sure the decline of audience size is the main reason why the profits had decreased. We need to investigate other issues that may affect the profitability of the operation. For example, did the increase of advertising expenses cause the decrease of profits? Or maybe the overhead expenses of the CS theatre were out of control. If these are the cases, more efforts should be made to reduce expenses rather than introducing new program to attract audience.
In the meantime, we need to ask if Free Play in the Park (FPP) program actually led to the increase of profits for Avon. The name "Free Play in the Park seems to imply that the program would offer free admission to the plays in order to attract more audience. It is not clear how a program like this can directly increase the profits. Maybe Avon had taken other measures to boost its profit level while the program was introduced. For example, they might hire a new manager to effectively control different expenses. Or maybe they had reduced the advertising expenses by switching from more expensive traditional media marketing to less costly new media marketing. If Avon had achieved profit increase through other methods, then the proposal to adopting a similar program may not produce desirable outcome.
Finally, even if FPP has increased the profits for Avon in a somewhat mysterious way, we need to ask if the proposed program SP is similar enough to FPP to help the CS theatre to increase the profit. Again, the name of FPP suggests that the program may feature a variety of plays of different themes, which may appeal to a broader group of audiences. Shakespeare in the Park, on the other hand, will offer a limited range of programs based on works by Shakespeare. Of course, we need to take into account the extra cost of the new program that can further affect the balance sheet. If SP program cannot attract more audience and increase profits as FPP did, the recommendation would not be reasonable.
In conclusion, it is not clear attracting more audience is the key for profitability of the CS theatre. Nor is it certain that the FPP program was the main reason why Avon increased the profits. Moreover, we do not know if SP could be as successful as FPP. In order to evaluate the recommendation, therefore, the questions discussed above have to answered through further investigation.
"Over the past ten years, there has been a 20 percent decline in the size of the average audience at Classical Shakespeare Theatre productions. In spite of increased advertising, we are attracting fewer and fewer people to our shows, causing our profits to decrease significantly. We must take action to attract new audience members. The best way to do so is by instituting a 'Shakespeare in the Park' program this summer. Two years ago the nearby Avon Repertory Company started a 'Free Plays in the Park' program, and its profits have increased 10 percent since then. If we start a 'Shakespeare in the Park' program, we can predict that our profits will increase, too."
Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation.
Essay:
The marketing director argues that the theatre should introduce a new program known as Shakespeare in the Park (SP) in order to increase the profits. We need to ask a number of questions about the causes of decline of profits for CS Theatre, the reasons why Avons profits increased and whether the proposed program will be as successful as the program of Avon.
To begin with, we are not sure the decline of audience size is the main reason why the profits had decreased. We need to investigate other issues that may affect the profitability of the operation. For example, did the increase of advertising expenses cause the decrease of profits? Or maybe the overhead expenses of the CS theatre were out of control. If these are the cases, more efforts should be made to reduce expenses rather than introducing new program to attract audience.
In the meantime, we need to ask if Free Play in the Park (FPP) program actually led to the increase of profits for Avon. The name "Free Play in the Park seems to imply that the program would offer free admission to the plays in order to attract more audience. It is not clear how a program like this can directly increase the profits. Maybe Avon had taken other measures to boost its profit level while the program was introduced. For example, they might hire a new manager to effectively control different expenses. Or maybe they had reduced the advertising expenses by switching from more expensive traditional media marketing to less costly new media marketing. If Avon had achieved profit increase through other methods, then the proposal to adopting a similar program may not produce desirable outcome.
Finally, even if FPP has increased the profits for Avon in a somewhat mysterious way, we need to ask if the proposed program SP is similar enough to FPP to help the CS theatre to increase the profit. Again, the name of FPP suggests that the program may feature a variety of plays of different themes, which may appeal to a broader group of audiences. Shakespeare in the Park, on the other hand, will offer a limited range of programs based on works by Shakespeare. Of course, we need to take into account the extra cost of the new program that can further affect the balance sheet. If SP program cannot attract more audience and increase profits as FPP did, the recommendation would not be reasonable.
In conclusion, it is not clear attracting more audience is the key for profitability of the CS theatre. Nor is it certain that the FPP program was the main reason why Avon increased the profits. Moreover, we do not know if SP could be as successful as FPP. In order to evaluate the recommendation, therefore, the questions discussed above have to answered through further investigation.
