1
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
MARKETING
© 2009 South-Western, Cengage Learning
2
©CREDIT SUISSE
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?
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning
3
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
MARKETING
© 2009 South-Western, Cengage Learning
4
Marketing Costs Affect Business
Success
The importance of finances
The role of marketing in financial
planning
 Target markets
 Marketing mix
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning
5
Managing Marketing Costs
Long-term expenses
Short-term expenses
Financing marketing activities
 Capital expenses
 Inventory expenses
 Operating expenses
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning
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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
MARKETING
© 2009 South-Western, Cengage Learning
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Planning Tools and
Operating Tools
Planning Tools
 Forecasts
 Budgets
Operating Tools
 Financial statements
 Income statement
 Balance sheet
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning
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Using Financial Tools
Developing forecasts and budgets
 Past performance
 Industry performance
 Marketing-related data
 Marketing plan
Gathering information for financial
statements
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning
9
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
644
Total Budgeted Expenses
$29,227
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning
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Analyzing Financial Information
Using financial information
Increasing revenues
Controlling costs
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning
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Marketing Strategies to
Increase Profits
Increase sales
while holding
costs steady
Sales
If sales are steady,
reduce costs to
increase profits
Sales
Profit
Costs
Chapter 20
MARKETING
Profit
Costs
© 2009 South-Western, Cengage Learning
12
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
MARKETING
© 2009 South-Western, Cengage Learning
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Effects of Marketing on Revenue
Sales of products and services
After-sale revenue
Credit and interest
 Credit cards
 Unpaid credit
 Regulation
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MARKETING
© 2009 South-Western, Cengage Learning
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Expenses Associated with the
Marketing Mix
Product expenses
Distribution expenses
Price expenses
Promotion expenses
Chapter 20
MARKETING
© 2009 South-Western, Cengage Learning