Question

Dividing the NMC by the investment in marketing and sales produces the marketing return on investment.

a)True
b)False

Answer 1

Dividing the NMC by the marketing and sales investment does not yield the marketing ROI. The correct way to calculate Marketing ROI is subtracting the marketing expenses from the NMC and dividing by the marketing expenses.

Step-by-step explanation:

The question relates to the concept of Marketing Return on Investment (ROI), which is a measure used to evaluate the efficiency and profitability of a company's marketing efforts. Dividing the Net Marketing Contribution (NMC) by the investment in marketing and sales does NOT produce the marketing ROI. Instead, Marketing ROI is typically calculated by subtracting the marketing and sales expenses from the gross profit attributable to marketing efforts (Net Marketing Contribution) and then dividing that figure by the marketing and sales expenses.