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Analysing Marketing Profitability: Sales Are a Dangerous Cost‐driver

European Journal of Marketing

ISSN: 0309-0566

Article publication date: 1 February 1992

Abstract

Discusses the issues raised by general criticism of the traditional accounting‐based analysis of profitability and in particular of data quality and relevance, from the perspective of strategic marketing decisions. The major validity problem of profitability analysis is related to the assumption about sales as a cost‐driver for marketing activities. Case studies from two companies illustrate the importance of conducting the analysis based on relevant data. Suggests why and how marketing costs should be allocated to both products and customers.

Keywords

Citation

Selnes, F. (1992), "Analysing Marketing Profitability: Sales Are a Dangerous Cost‐driver", European Journal of Marketing, Vol. 26 No. 2, pp. 15-26. https://doi.org/10.1108/03090569210010013

Publisher

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MCB UP Ltd

Copyright © 1992, MCB UP Limited