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Metrics 8

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Department
Marketing
Course
MKT 100
Professor
Paul Finlayson
Semester
Winter

Description
MKT100 - Metrics Mastery Worksheets By: Fawad Syed ID: 500404091 Date: March 29, 2011 Worksheet: Metric 8 Return on Marketing Investment (ROMI) 1) A marketer is evaluating two marketing campaigns. It is estimated that Campaign 1 would generate incremental revenues of $250,000, at an incremental cost of $50,000 and a contribution margin of 30%. Campaign 2 would generate incremental revenues of $50,000, at an incremental cost of $20,000 and a contribution margin of 50%. If the marketer is basing their decision solely on ROMI, which campaign should they go ahead with? 250000*(.30)-50000500000 = 50 =50000*.50-20000=25% 2) A clothing retailer is considering investing in a newspaper advertising campaign to generate more sales. The campaign is expected to cost $3,000 in creative agency fees and $9,000 in circulation costs, while increasing revenues from $110,000 to $170,000. The retailers contribution margin averages 25%. What would be the return on the marketing investment o
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