EBK PRINCIPLES OF MARKETING
17th Edition
ISBN: 9780134461434
Author: Armstrong
Publisher: YUZU
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Question
Chapter 2, Problem 2.14AC
Summary Introduction
Case summary:
Company A has profits of more than $50 billion on sales of $182 billion and Company M has profits of $30 billion on sales of $88 billion.
Characters in case:
Company P and Company V
Introduction:
Net profit margin is the amount left after the deduction of all expenses, interest, and
Net marketing contribution is calculated to determine whether the marketing strategy is available to cover the cost which is associated with the company’s sales and marketing.
Return on marketing investment refers to the overall performance of the campaign of the market.
Market return on sales is determined to calculate the difference between the two companies.
Adequate information:
| Particulars | Company P | Company V |
| Sales | $125,897,000 | $87,421,000 |
| Gross profit | $50,439,000 | $20,899,000 |
| Marketing expenses | $4,333,750 | $13,474,000 |
| Net income | $42,305,000 | $17,957,000 |
| Selling & administrative expenses | $6,127,000 | $4,564,000 |
| General expenses | $2,641,320 | $3,854,600 |
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