Strategic Marketing Management

An organization must utilize its resources optimally and keep track of where and how the resources are being spent on marketing activities. Marketing costs are the costs incurred on the company's efforts to attract and retain customers. Marketing cost analysis is the identification of costs incurred while marketing and distributing a product.

The marketing cost analysis helps the managers in effective decision-making, formulation of marketing strategy, and planning and controlling marketing activities. Marketing cost analysis helps the managers to identify customers who are profitable and those who are unprofitable.

There are three types of costs that are important in the marketing cost analysis process – fixed, variable, and semi-variable costs. Marketing productivity is the measurement of the desirable output for a given amount of input. Marketing productivity can be measured by the effective efficiency method. The effective efficiency method uses two important factors of acquiring and retaining customers.