Briefly Discuss How Marketers Measure Return on Marketing Investment

question 91

Essay

Briefly discuss how marketers measure return on marketing investment. Explain why this figure may not be sufficient to judge marketing's effectiveness.

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Definitions:

Profit Margin

A financial metric used to assess a company's profitability by dividing net income by revenue.

Net Income

is the amount of money that remains after all expenses, taxes, and costs have been subtracted from a company's total revenue, also known as the bottom line.

Full Capacity Sales

The maximum potential sales revenue a firm can achieve when operating at total capacity.

External Financing Needed

The amount of funding a company needs to raise from outside sources to finance its business operations or growth plans.