Estimating the Impact of a Marketing Plan

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Marketing Plans: Progress Reports & Revisions

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
Your next lesson will play in 10 seconds
  • 0:03 Estimating the Impact…
  • 0:45 Developing a Marketing Plan
  • 3:33 Cost-Benefit Analysis
  • 5:25 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Speed Speed
Lesson Transcript
Instructor: Danielle Eiseman
Estimating the impact of a marketing plan can give you insight into how it is benefiting your business and marketing objectives. In this lesson, you'll learn more the impact of a marketing plan.

Estimating the Impact of Marketing

You have decided to go into business for yourself selling cookies. Everyone likes cookies, right? You already have a great recipe and your friends and family love the variety of cookies you make, but you need to figure out how to tell more people about your wonderful cookies. You need to come up with a marketing plan.

A marketing plan helps you determine the best way to speak to your customers in the most efficient and cost-effective way possible. This lesson will provide you with a brief overview of how you can determine the impact of your marketing plan, as well as how to estimate the return on investment (or ROI) and how to create a cost-benefit analysis. These three components will help you determine the overall success of your marketing plan.

Developing a Marketing Plan

To determine if your plan is effective, businesses can use a series of marketing metrics to measure the costs associated with delivering a marketing plan, and also, to measure the impact, or reach, of the marketing plan. Marketing metrics vary based on the type of marketing plan you deliver. Many companies now prefer to use the internet to deliver marketing plans because the cost to reach customers is significantly less than traditional forms of communication, such as magazine, television commercials, radio commercials, or communications sent through the mail.

Delivering a marketing plan requires resources. For example, if you decide the best way to tell people about your cookie business is by creating an ad on the internet, you may need to hire a specialist to design the ad as well as a logo for your business. You will also need to pay for the ad to be on specific websites to reach your potential customers. Since you decided to run your plan online, you would use marketing metrics that measured the number of times a person clicked on your ad to view it. You could also measure the impact of your plan by looking at changes in your sales revenue over a period of time. Comparing the costs associated with running your online ad to your change in sales will indicate your return on investment, or ROI.

The best way to determine if your ad will be worth the potential costs is to estimate your ROI. This is done with a simple calculation in which you subtract your marketing from your estimated sales growth and divide by the marketing costs.

(Estimated sales growth - marketing costs) / marketing costs = ROI

So, if you estimate that your sales will grow by $1000 over a period of 3 months and you spend $600 on your online ad for three months, then your ROI would be:

(1000 - 600 ) / 600 = 0.667

To turn that into a percentage, which ROI is often reported in, you would multiply 0.667 with 100 to indicate an ROI of 66.7%. This is considered a very good return; however, with marketing, there is also a general rule of thumb when it comes to estimating how much you should spend compared to your sales. This general rule of thumb suggests that for every $5 you earn in sales, you should spend $1 on marketing. This ratio is a much simpler way to estimate the ROI of a marketing plan.

Perhaps your cookie company has started to grow a little bit, and you want to expand a bit more. You may decide to incorporate other forms of marketing communications into your plan, such as radio commercials or even a local billboard. As with the online ad, these forms of marketing will require resources associated with the design and delivery of the plan. Also, these forms of marketing communications are typically more expensive than online advertising.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account