Controller's Guide to Planning and Controlling Operations

3

PLANNING AND CONTROL OF MARKETING EXPENSES

INTRODUCTION

The planning and control of sales are discussed in the preceding chapter. But the relationship between sales and the effort (the marketing effort) to achieve the sales plan is so close, that it is practical to now review the planning and control of marketing expenses.

DEFINITION

In a broad sense, marketing expenses may be defined as the costs relative to all activities from the time goods are produced/manufactured or from the time of purchase in a nonmanufacturing company until the products reach the customer—the cost of marketing or selling. This would include the applicable portion of all costs, including general, administrative, and financial expenses. For our purposes here, however, the discussion is limited to those expenses, exclusive of general, administrative, and financial expenses, that are normally under the control of the marketing or sales executive. They may include, but are not limited to, the following general classifications:

• Direct selling expense. All the direct expense of order-getting costs, including direct expenses of salespersons, sales management and supervision, branch sales offices, and sales service (the expenses generally incident to the solicitation of orders).
• Advertising and sales promotion expense. All media advertising expenditures, expenses relating to various types of sales promotions, market development, and publicity.
• Transportation expense. All transportation charges on outbound goods ...