1706

Problem

Assume that the information you requested in question 5 has been gathered for you. How would you determine whether advertising and personal selling funds should be shifted from one product to another?

Step-by-step solution

Show all steps

Step 1/4

The information necessary to monitor and control the performance of the products would include the following:

1. Market share

2. Average revenue per sales representative

3. Number of customers

4. Sales relative to the capacity

5. Sales growth rate

6. Contribution margin

7. Return on investment

Step 2/4

This information helps to analyze and compare the performance of the different products with the successful products of the company and the market. It also enables one to compare the products in terms of input and output.

For example, Contribution margin helps to evaluate the performance of particular activities in reference to consumption of the organization’s resources.

Step 3/4

Based on the above information, the given company can produce products meeting the requirement of the customers. The gathered information about the pricing of competitors’ products and the paying capacity of NAICS group can be used to compare the performance of the products.

This entire information forms the basis for making sound judgement All this results in forming the can From the information it is found that some product requires more advertisement and personal selling expenses than other product. Based on the analysis of information she can shift advertisement and personal selling cost from one product to other.

Step 4/4

For example:

Marketing manager can take following steps:

1. Reducing the expenditures on particular products

2. Increasing the output of the system

3. A sales manager can search for options to reduce the number of sales calls on unprofitable products

4. Or, he/she can find ways to make sales person more effective with those unprofitable products.