ABSTRACT
Sales segments of a company are measured on sales performance only, and very little recognition is given to the amount of investment dollars that are tied up in the business. Return on marketing assets follows the Return on investment (ROI) concept by applying ROI principles to evaluating the marketing side of the business. To illustrate this marketing concept further, the two major components of ROI previously discussed will be used, namely, the profitability rate and the turnover rate. Marketing contribution results from taking net sales by marketing territory, less cost of sales and selling expenses used by the marketing territory to sell the product. An explanation is in order for determining marketing assets by sales territory. Both accounts receivable and inventories are assets that are generally controllable by the sales territory. Changes in sales volume, sales mix, and asset utilization must be fully evaluated by management in order to ensure the highest maximization of return on assets to the company.
