Company Net Marketing Contribution and Marketing ROI ( Figure 2-13 ) A. For a co
ID: 380235 • Letter: C
Question
Company Net Marketing Contribution and Marketing ROI ( Figure 2-13 )
A. For a company of interest, obtain the required input from a company annual report. Evaluate the company’s marketing profitability and how it contributes to net profit before taxes.
B. How would marketing profits and net profit change if sales increase by 25 percent? C. Evaluate the profit impact of a strategy in which the percent margin is increased by 5 points and marketing and sales expenses are increased by 2 percentage points.
Sales Revenues $125 million Marketing ROS 24% Gross Profit $48.5 million Percent Margin 38.8% Net Marketing Contribution $30 million Marketing & Sales Expenses $18.5 million Operating Income $10 million Marketing ROI 162% Other Operating Expenses $20 millionExplanation / Answer
a) TURN AROUND MANAGEMENT
Turn around Management is related to the renewal of business with restructuring. If an organisation is under financial stress, a process of analysis and planning is deployed to pull out such companies out of trouble, correct the reasons for failure and set the companies functioning well again.
b) MERGERS AND AQUISITION (M&A)
Merger happens when two companies get merged into a single entity. eg Daimler Bemz and Chrysler.
On the other hand, aquisition happens when a company aquires another company and it is possible that both companies keep running in existing names. It is also called as a takeover.
The Mergers and Aquisition process provides the best benefits of both the entities.
c) Role Negotiation Technique
This is a team building technique developed by Roger Harrison and involves negoatiation between the participants so as to improve team effectiveness. People are generally resisting to change and so role negotiatio technique helps a person to lists down the behavior which is faciliating work or hindering the work and productivity. This helps in work relationships and hence team effectiveness.
d) Transaction Analysis
Transaction Analysis was developed by Dr Eric Berne in the 1950s and is a pyschoanalytic theory and helps people understand their own and other's behaviour in interpersonal relationships. Here, the social transactions are analysed to determine the ego state - parent/ child/ adult -like as a basis to understand behavior and suggest corrections.
e) Role of a leader in Change Management
A leader is an important bridge between the current situation and the desired change. A leader shows the new state and how same will benefit all, aligns the team and prepares them for the journey ahead and then takes them along to cross the bridge. With care, communication and commitment, a leader plays this role well by first developing a mindset, seek support of the team and then walking the path with them. So, a leader plays various roles like sponsor, role modelling, decision maker, communicator, engagement and accountability.
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