Net Marketing Contribution
Marketing by the Nurnbers, discusses other marketing profitability metrics beyond the return on marketing investment (marketing ROI) measure described in this chapter. Below are profit¬and-loss statements for two businesses. Review Appendix 3 and answer the questions below.
1. Calculate marketing return on sales (or marketing SOS) and rnarketing return on investment (or marketing ROI) for both companies as described in Appendix 3.
2. Which company is doing better overall and with respect to marketing, Explain.
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Business A
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Net Sales
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S800.000.000
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Cost of goods sold
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375.000.000
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Gross Margin
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S425.000.000
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Marketing Expenses
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Sales expenses
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$70000000
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Promotion expenses
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30,000.000
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100.000.000
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General and Administrative Expenses Marketing salaries and expenses
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S10.000,000
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Indirect overhead
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80.000.000
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90.000.000
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Net profit before income tax
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9235,000,000
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Business B
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N. Sales
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S900,000,000
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Cost of goods sold
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400,000.000
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Gross Margin
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S500,000,000
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Marketing Expenses
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Sales expenses
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$90,000,000
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Promotion expenses
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50,000,000
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140,000,000
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General and Administrative Expenses
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Marketing salaries and expenses
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S 20,000,000
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Indirect overhead
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100,000,000
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120,000.000
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Net profit before income tax
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0240,000,000
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