Reference no: EM133481106

Marketing by the Numbers Marketing managers are facing increased accountability for the financial implications of their actions. This appendix provides a basic introduction to measuring marketing financial performance. Such financial analysis guides marketers in making sound marketing decisions and in assessing the outcomes of those decisions. The appendix is built around a hypothetical manufacturer of home automation products-Wise Domotics ("domotics" refers to information technology in the home). The company is introducing a device that allows users to control all internet-connected smart devices in their homes. Users will be able to control lighting, temperature, multimedia, security systems, appliances, windows and doors, phones, and any other smart devices in their homes that are connected to the internet. In this appendix, we will analyze the various decisions Wise Domotics's marketing managers must make before and after the new product launch. The appendix is organized into three sections. The first section introduces pricing, break-even, and margin analysis assessments that will guide the introduction of Wise Domotics's new product. The second section discusses demand estimates, the marketing budget, and marketing performance measures. It begins with a discussion of estimating market potential and company sales. It then introduces the marketing budget, as illustrated through a pro forma profit-and-loss statement followed by the actual profit-and-loss statement. Next, we discuss marketing performance measures, with a focus on helping marketing managers to better defend their decisions from a financial perspective. In the third section, we analyze the financial implications of various marketing tactics. Each of the three sections ends with a set of quantitative exercises that provide you with an opportunity to apply the concepts you learned to situations beyond Wise Domotics.