The net return from a marketing investment divided by the costs of the marketing investment

1)“Marketing ROIis the net return from a marketing investment divided by the costs of themarketing investment. It measures the profits generated by investments in marketing activities”.Any organization's purpose should be to gain and/or raise profits. Companies will increase theodds of meeting those targets by providing ways to calculate short-term goals and return oninvestments.Results should be used by policymakers to guide the process of decision-making.Other measures that are used to determine the impact of a marketing campaign are customerretention and customer engagement.Customer retention is the collection of practices used by an organization to maximize the numberof returning customers and to increase each current customer's profitability. Strategies forcustomer retention help you to both offer and gain more value from your current customer base.You want to guarantee that the consumers you have worked so long to attract stick with you,have a better consumer service, and continue to get value from your goods.

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(Marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment. Marketing ROI provides a measurement of the profits generated by investments in marketing activities.Michael Porter’s four basic competitive positioning strategies

Overall cost leadership strategy is when a company achieves the lowest production and distribution costs and allows it to lower its prices and gain market shareDifferentiation strategy is when a company concentrates on creating a highly differentiated product line and marketing program so it comes across as an industry class leaderFocus strategy is when a company focuses its effort on serving few market segments well rather than going after the whole marketMiddle of the road-no clear marketing strategy, will not succeed2Competitive positions:Market leader is the firm with the largest market share and leads the market price changes, product innovations, distribution coverage, and promotion spendingMarket challengers are firms fighting to increase market shareMarket followers are firms that want to hold onto their market share Market nichers are firms that serve small market segments not being pursued by other firms

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Marketing

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Definition: Return on marketing investment or ROMI is a metric used in online marketing to measure the effectiveness of a marketing campaign. It examines results in relation to the specific marketing objective. ROMI is a subcategory of return on investment or ROI, because here the cost is incurred on marketing.

Description: Marketing a product could be expensive across various avenues available such as a website, social media, print, magazines, or hoardings. To gauge the effectiveness of the marketing campaign, companys resort to ROMI.

In simple terms, it is measured by calculating total revenues against marketing investment. It should only reflect the direct impact of a marketing campaign. For ROMI to be effective, it is important for the campaign to have some measured metrics.

The marketing manager should define the activities (quantified) that the end result will be measured with. They should also define the data which will be required to complete the analysis.

One basic formula for calculating the return on marketing investment is:

Gross Profit – Marketing Investment -------------------------------------------------- Marketing Investment

Here the gross profit is the total revenue earnings and marketing investment is the total cost incurred on marketing across different mediums such as online, print, etc.

Let’s understand the concept with the help of an example. A company XYZ sells tables online. Before the campaign is displayed on various websites such as Urban Ladder, Pepperfry, etc., the company was generating revenues worth Rs 1,00,000 and the profit was Rs 20,000 – which means the cost was around Rs 80,000.

Now, the company launched its ad campaigns across websites and the revenue grew to Rs 1,25,000 in that particular month with a gross profit of Rs 25,000.

Campaign cost is Rs 4,000.

ROMI here would be = Incremental value – cost of campaign= 25,000-20,000-4,000 = Rs 1,000

ROMI is 1000/4000 = 25%

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