Marketing Cost Analysis

If the cost system reported sales volume and/or price we would be able to conduct an activity analysis to determine an appropriate cost function to determine the best cost driver for each product.

In the context of global expansion and competition of numerous businesses, effective marketing management is one of the key factors of success, playing an essential role in obtaining competitive advantage. Hence, the success of a company is determined by its ability to identify customers’ needs and offering products and/or services to satisfy them.

While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas

Your company’s solution should follow and be judged by the following criteria. Accurate Profitability, by allocating costs more precisely you will be able to trace and record each customer’s profits and losses. Future Potential of Customers, with a more accurate method of allocating costs and profitability your company will have a greater understanding when making decisions on the future potential of each

Kotler, P., & Keller, K. (2012). Marketing Management (14th ed., pp. 517-518). Essex, London: Prentice Hall.

Cost of Sales and Net Sales are another important component of an income statement for assessing a company’s financial health. As mentioned in Macy’s 10K form, the cost of the sales and net sales in 2015 were $16,496 millions and $27,079 millions respectively. Whereas the cost of sales and net sales in 2016 were $15,621 millions and $25,778 millions respectively (p. 16). Therefore, the ratio of cost of sales to net sales in 2015 would be 0.609 or 60.9% ($16,496/$27,079 = 0.6091) and the ratio of cost of sales to net sales in 2016 would be 0.605 or 60.5% ($15,621/$25,778 = 0.605). The ratio of cost of sales to net sales is a part of ratio analysis, which is used to check the efficiency of the business (Kumar, 2012). It is also used to calculate the gross

Shareholders want results and returns immediately while management knows it would take strategic planning to take the investment forward, it can lead to an agency cost. The project is a risky venture because it can bring many disagreements between managers and stockholders putting aside the company’s long-term objectives and goals to increase the value. Financial decisions in marketing are to increase sales and demand, therefore it helps to improve return on equity. As said before a market research is necessary for each designated location and to learn about the mass market they are about to enter. Finance helps to fund and implement marketing strategy which is crucial in the future to generate loyal customers, the most profitable customers for a company. The product mix is going to grow in its all four dimensions and would take financial decisions from the marketing managers to see what products are convenient for the customers. Financial decisions in operations deal mainly with the supply chain. To keep customers satisfied is necessary to invest heavily in logistics, technology, and inventory. Finance keeps track of every monetary move made by the company, like paying bills and collecting money generated. In other words, it assists to cut unnecessary operating costs and seek ways to improve the business operations by measuring performance.

With the introduction of ABC, it now may be possible to determine customer profitability. Table 3 shows how the administrative and selling costs are assigned and re-assigned between various functions within the selling and marketing areas and to sub-activities in the selling and marketing areas. Table 4 provides a list of

Preparing different income statements captures information in diverse ways to facilitate decision making on internal matters. The management needs to understand cost behavior in order to control the costs. Besides the production costs, changing sales patterns affects profitability and there is a need to achieve better sales accuracy after understanding cost behavior. Variable costing also captures information about the impact of changing operation on profitability and the management is better placed to make pricing decisions to maximize

“Marketing strategies can have a broad impact on the business in terms of instilling a marketing orientation among all those in the firm: the way of thinking or philosophy of the whole organization. However, marketing strategies can alternatively be seen as dealing only with the development of competitive advantages directly associated with the marketing function such as customer loyalty and distribution channel control. In the latter case, the domain is sometimes even further restricted by sole attention to the various element of the marketing mix rather than the more general issues of customer and channel relationships. There are two key

Marketing plays the most important role for the success of a business. In this chapter, the business’ marketing objectives are laid out together with the plans or actions that will be needed to achieve these objectives. Furthermore, this chapter includes the profile of the respondents which aided the researchers to create this part of the feasibility study.

The purpose of this paper is to answer a few important questions: Why do companies allocate costs? How do companies allocate costs? And how this cost allocation can affect the decision making of the company. It is important for the companies to find the proper method to allocate the costs. Cost allocation is an important issue in many companies because many of the costs associated with designing, producing and distributing products and services are not easily identified with the products and services that are created. It would have been easier for companies to allocate cost if costs were directly traceable with the products and the cost allocation would have been minor issue for the company. The decision-making

Marketing is selling the product goods and service by knowing the needs and wants of the customer and consumer (Kotler P, 2009). Marketing Management expertise has capable of knowing the change of an organisation to manage both the internal and external challenges of environment (Cant M C, et al, 2009). A company needs to classify the customer needs and identifies the demand of the supplying

cost-of-goods-sold section might be in relation to the sales total. In the case of a merchandising firm,

When sales volume increases, Company X will have a higher percentage increase in profit than Company Y. Company X's higher proportion of fixed costs gives the firm a higher operating leverage factor. The company's percentage increase in profit can be found by multiplying the percentage increase in sales volume by the firm's operating leverage factor. The sales mix of a multiproduct organization is the relative proportion of sales of its products. The weighted-average unit contribution margin is the average of the unit contribution margins for a firm's several products, with each product's contribution margin weighted by the relative proportion of that product's sales.