Definition: Marketing expenditure

Category:

Marketing is defined as all activities aimed at enlarging or serving a market position. It includes market research, advertising, promotion, sponsoring and public relations. These services may be provided 'in-house' in which case the investment should be calculated at production cost including labour cost, or may be bought in from third parties. Only a part of this expenditure is of an investment nature and the rest is consumption. A precise demarcation of marketing expenditure between investment and consumption can not be made and a strict definition would probably pose enormous data collection problems. In order to reduce this problem it is necessary to make some pragmatic simplifications for data collection purposes.

The measurement of marketing expenditure should be limited to:
- long-term marketing which covers the marketing of new products where the expected benefits will accrue over a period longer than one year;
- marketing costs of new market areas or segments where the expected benefits will accrue over a period longer than one year;
- the marketing costs of improving the unit's strategic position.