Question

Companies spend millions, if not billions of dollars on marketing every year. Pick a company that does significant marketing and is a public company. You will need to look up the company’s annual report to find the total amount spent on marketing for the last calendar year (20XX).

1. Once you find the information from the company’s website and annual report, explain the number and what the company reported spending the money on.
2. Do some mathematical comparisons, total revenue as compared to marketing budget, total liability as compared to marketing budget to determine the percentages the company plans to spend just on marketing.
3. ROI (Return on Investment) is also a calculation that can be conducted. Assume that any gain from the year prior to your current year selected is due to increased investment, what would be the percentage ROI that the company achieved by this increased investment. (estimated numbers are okay, as long as you show your work, calculations, and explain your answers.

Answer 1

Company Selected: Hasbro

According to the FY 2018 Annual Report, The amount spent on the advertising was $439.922 Million. Most of the advertising spend depends on the revenue mix because Hasbro advertises its products through multiple channels like Online Ads, TV Ads and through print and newspaper. Within these mediums, there are specific TV channels which are owned or partnered by Hasbro. The advertising expense was lower than in 2017 owing to lower Revenues.

Total Revenue: $4,579.646 Million

Marketing Budget: $439.922 Million

Total Liabilities: $3,508.502 Million

Ratio of Marketing Budget to Total Revenue= 9.6%

Ratio of Marketing Budget to Total Liabilities = 12.54%