MKT 310 Lecture Notes - Lecture 10: Customer Satisfaction, Cash Flow, Gross Margin
Document Summary
Benefits are defined as the tangible net amount of dollars that result from an initiative. Payback analysis helps understand the relationship between investment and future benefit: identify upfront and ongoing costs of program and predict sequence and timing of anticipated benefits. Program can be a marketing campaign, new computer system, office expansion, new product, or acquisition; any project that requires an expenditure. Sequence and timing of benefits suggest some costs for program may be immediate and up front, while others may occur at intervals of project. Benefits may not be realized until sometime in the future: determine resulting cash flow in each period, fees occur, determine cumulative cash flow. Payback occurs when the cash flow is a positive number. Breakeven analysis is estimating the number of units that must be sold to pay off all of the incurred marketing expenses: cost divided by margin/unit. Customer satisfaction is directly related to future sales; marketers must effectively manage levels of customer satisfaction.
