1. MARKETING REQUIRES MONEY
CHAPTER 20
6/18/2018
CHAPTER 20
MARKETING REQUIRES MONEY
20-1 Marketing Affects Business Finances
20-2 Tools for Financial Planning
20-3 Budgeting for Marketing Activities
Chapter 20

2. Chapter 20 Focus Questions:
What is the focus of the advertisement for Credit Suisse?
Why do both consumers and businesses need to manage their finances?
What are the benefits to both?
©CREDIT SUISSE
Chapter 20

3. MARKETING AFFECTS BUSINESS FINANCES
20-1
MARKETING AFFECTS BUSINESS FINANCES
GOALS
Explain how marketing affects a business’s financial planning.
Define short- and long-term marketing expenses and the various types of financing for marketing activities.
Chapter 20

4. Marketing Costs Affect Business Success
The importance of finances
The role of marketing in financial planning
Target markets
Marketing mix
Chapter 20

5. Managing Marketing Costs
Long-term expenses
Short-term expenses
Financing marketing activities
Capital expenses
Inventory expenses
Operating expenses
Chapter 20

6. TOOLS FOR FINANCIAL PLANNING
20-2
TOOLS FOR FINANCIAL PLANNING
GOALS
Describe the principal planning and operating tools used by business.
Detail how marketers develop forecasts, budgets, and financial statements.
Explain the kinds of financial analyses marketers perform to increase profits.
Chapter 20

7. Planning Tools and Operating Tools
Forecasts
Budgets
Operating Tools
Financial statements
Income statement
Balance sheet
Chapter 20

8. Using Financial Tools Developing forecasts and budgets
Past performance
Industry performance
Marketing-related data
Marketing plan
Gathering information for financial statements
Chapter 20

9. Planned Monthly Customer Service Department Expenses
Developing A Budget
Planned Monthly Customer Service Department Expenses
Management Salary $ 4,028
Personnel Wages 18,840
Facility Expense (space and utilities) 3,526
Office Equipment 305
Telephone Expense 498
Computer Expense 295
Postage 86
Supplies 175
Travel Expense 830
Product Returns and Replacements
Total Budgeted Expenses $29,227
Chapter 20

10. Analyzing Financial Information
Using financial information
Increasing revenues
Controlling costs
Chapter 20

11. Marketing Strategies to Increase Profits
Increase sales while holding costs steady
If sales are steady, reduce costs to increase profits
Sales
Profit
Sales
Profit
Costs
Costs
Chapter 20

12. BUDGETING FOR MARKETING ACTIVITIES
20-3
BUDGETING FOR MARKETING ACTIVITIES
GOALS
Explain the various ways that businesses raise revenue through marketing activities.
Describe the kinds of marketing expenses that arise in conjunction with each element of the marketing mix.
Chapter 20

13. Effects of Marketing on Revenue
Sales of products and services
After-sale revenue
Credit and interest
Credit cards
Unpaid credit
Regulation
Chapter 20

14. Expenses Associated with the Marketing Mix
Product expenses
Distribution expenses
Price expenses
Promotion expenses
Chapter 20