Company Net Marketing Contribution and Marketing ROI ( Figure 2-13 )

A. For a company of interest, obtain the required input from a company annual report. Evaluate the company’s marketing profitability and how it contributes to net profit before taxes.

B. How would marketing profits and net profit change if sales increase by 25 percent? 

C. Evaluate the profit impact of a strategy in which the percent margin is increased by 5 points and marketing and sales expenses are increased by 2 percentage points.

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Sales Marketing Revenues ROS $125 million Gross 24% Profit $48.5 million Percent Margin 38.8% Net Marketing Contribution $30 million Marketing & Sales Expenses $18.5 million Operating Income Marketing ROI $10 million 162% Other Operating Expenses $20 million Sales Marketing Revenues ROS $125 million Gross 24% Profit $48.5 million Percent Margin 38.8% Net Marketing Contribution $30 million Marketing & Sales Expenses $18.5 million Operating Income Marketing ROI $10 million 162% Other Operating Expenses $20 million

Answer rating: 100% (QA)

Market profitability is one of the important factor in determining the profitability of the company ... View the full answer