Question

Marketing return on investment equals ________.

A) profits/marketing & sales expenses x 100%
B) net marketing contribution/operating expenses x 100%
C) net marketing contribution/marketing & sales expenses x 100%
D) gross margin/total expenses x 100%
E) sales revenues/marketing & sales expenses x 100%

Answer 1

The marketing return on investment (ROI) is calculated by dividing the net marketing contribution by the marketing & sales expenses and multiplying by 100%.

Step-by-step explanation:

The correct answer is option C) net marketing contribution/marketing & sales expenses x 100%.

Marketing return on investment (ROI) is a financial metric that measures the profitability of marketing activities. It is calculated by dividing the net marketing contribution by the marketing & sales expenses and then multiplying by 100%.

Net marketing contribution is the revenue generated by marketing activities minus the variable marketing costs. Marketing & sales expenses include all costs associated with marketing and sales activities.

For example, if a company generates $100,000 in revenue from marketing activities and incurs $50,000 in marketing & sales expenses, the net marketing contribution would be $50,000. Dividing this by the marketing & sales expenses and multiplying by 100% gives a marketing ROI of 100%.