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Marketing Cost Analysis

What is a Marketing Cost Analysis

Definition of Marketing Cost Analysis

A marketing cost analysis is essential for any new project, product or campaign. It is designed to provide a comprehensive breakdown of all the costs associated with a new marketing campaign, in order to calculate profit margins and to determine the value of the investment in marketing. 

A good marketing cost analysis should include not just the monetary costs (including indirect costs, such as shipping and taxes), but also the cost of energy, focus and time. These intangible costs can be much harder to evaluate but are vital when determining the overall value of a campaign.

General FAQ

Why do firms conduct marketing cost analysis?
Businesses undertake marketing cost analysis to pinpoint the potential risks and gains of a marketing campaign. The aim is to understand how much the promotion and distribution of a product will cost, and create an accurate, contextualized estimation of its profitability.
What should the marketing cost analysis include?
A marketing cost analysis should include numerous elements, such as the cost of creating logos, training sales teams on the product, shipping to sellers, promoting the product across all relevant channels, and conducting marketing research. It’s about the time and resources invested in marketing activities, too. Performing a comprehensive marketing cost analysis helps companies to manage expenses carefully and aim for maximum profitability.

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