This is my summary of the 'marketing by numbers' from the book Principles of Marketing by Kotler and Armstrong. It consists of all the calculations that you can find in the book.
International Business and Management Studies / IB
Marketing
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Marketing calculations
Calculations for marketing efficiency: to know if the outcome is good, you must compare the figure
to previous ROS levels of the product. The higher the better.
Return on marketing investment: (marketing ROI) is the net return from a marketing investment
divided by the costs of the marketing investment. Marketing ROI provides a measurement of the
profits generated by investments in marketing activities.
1. Find marketing expenses: the costs of the marketing investments
Calculation: Marketing expenses = sales expenses + promotion expenses + marketing salaries and
expenses
2. Find net marketing contribution (NMC): the net return form a marketing investment
Calculation: NMC = net sales – cost of goods sold – total marketing expenses
3. Find ROI
Calculation: ROI = net marketing contribution (NMC) / marketing expenses
Return on sales: (marketing ROS) the percent of net sales attributable to the net marketing
contribution. Calculated by dividing net marketing contribution by net sales.
1. Find the net sales
2. Find the net marketing contribution (NMC): the net return form a marketing investment
Calculation: NMC = net sales – cost of goods sold – total marketing expenses
3. Find ROS
Calculation: ROS = net marketing contribution (NMC) / net sales
Discount campaigns: If you want to organize a discount campaign you need to know at what
percentage sales will increase again. Because of the discount, you will have less revenue.
1. Find turnover in existing situation
Calculation: Product amount * price single product = turnover
2. Calculate the price per single product with the discount (10%)
Calculation: Normal price product * 0,9 = discounted product price
3. Calculate number of single items to sell in order to maintain turnover
Calculation: Turnover / discounted product price = number of items to sell
4. Calculate by what percentage the sales need to increase in order to maintain the turnover
Calculation: (N-O) / O * 100 = % of sales increase
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