Marketing Cost Analysis--Development and Current Practices.

Abstract This study was limited to marketing cost analysis practices for manufacturers, and included twenty-eight companies engaged in a wide variety of industries. In each company, accounting and marketing management personnel were interviewed and reports were examined in order to establish the nature of accounting reports, periodical and special, issued to marketing management and the technical aspects of their preparation. This survey also revealed that in one firm more than fifty percent of the total number of customers brought in less than two percent of the sales volume. In the same case, forty percent of the number of items carried in stock amounted to less than two percent of sales volume. The extent of the misdirection of marketing effort is revealed by these facts and the knowledge that many marketing costs are influenced by the number of customers, and size of the product line and inventory. Finally it can be concluded that analyses relative to customers, channels, salesmen, and order sizes are not widely prepared at present. This would certainly indicate a failure to orient cost accounting analysis to the market as would be suggested by the reorientation of managerial interest.