Based on your decisions and your estimates for segment sizes and product shares, the marketing plan tool can make financial projections for the decision period. This form, depicted in Figure 61, shows a pro forma firm profit and loss statement, similar to the one in your annual report.
The lines from Revenues to Contribution after marketing are obtained by summing the columns in the previous form Product contribution. The other lines are explained below:
(a) Market research studies: Equal to the total cost of the market studies ordered in your decisions; the cost of each study is given in the Market studies decision form.
(b) Marketing Initiatives: Equal to the total cost of the marketing initiatives implemented in your decisions; the cost of each initiative is given in the Marketing Initiatives decision form.
(c) Research and development: Equal to the sum of all budgets allocated to R&D projects in your decisions; the allocated budget is one of the many decisions which you have to make when initiating or continuing a research project.
(d) Exceptional costs & profits: Usually equal to 0. You may incur an exceptional cost if you decide to withdraw a product; in this case, any remaining inventory will have to be disposed of, the cost of which will be calculated as explained previously in the Inventory disposal loss.
(e) Earnings before taxes: Equal to Contribution after marketing – (a) – (b) – (c) – (d)
Figure 61 – Marketing Plan – Company P&L statement