Question

Which of the following is true of the net marketing contribution of a firm?

A) It is an internal in-process financial metric.
B) It sets a benchmark to gauge improving or deteriorating marketing profitability.
C) It is equal to the revenues of the firm.
D) It includes all operating expenses.
E) General and administrative expenses are included to assess the net marketing contribution.

Answer 1

The net marketing contribution sets a benchmark to gauge improving or deteriorating marketing profitability by subtracting variable and direct costs from marketing-generated revenues, not including all operating expenses or general and administrative expenses.

The corret opction is:b

Step-by-step explanation:

The net marketing contribution of a firm is a measure of the profitability of a company's marketing efforts.

It is not simply equal to the revenues of the firm, as revenues are only part of the calculation.

The correct statement regarding the net marketing contribution is:

B) It sets a benchmark to gauge improving or deteriorating marketing profitability.

This calculation serves as an internal financial metric, helping a firm to understand the effectiveness of its marketing activities by subtracting the variable costs directly associated with marketing and the direct costs of producing the goods or services being marketed from the revenues generated through marketing efforts.

It does not include all operating expenses, such as general and administrative expenses, because those are not directly tied to marketing activities.