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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.
Business A
Net Sales
S800.000.000
Cost of goods sold
375.000.000
Gross Margin
S425.000.000
Marketing Expenses
Sales expenses
$70000000
Promotion expenses
30,000.000
100.000.000
General and Administrative Expenses Marketing salaries and expenses
S10.000,000
Indirect overhead
80.000.000
90.000.000
Net profit before income tax
9235,000,000
Business B
N. Sales
S900,000,000
400,000.000
S500,000,000
$90,000,000
50,000,000
140,000,000
General and Administrative Expenses
Marketing salaries and expenses
S 20,000,000
100,000,000
120,000.000
0240,000,000
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