Marketing Generics Application Note:

How to Calculate Simple ROI for New Projects

New products and projects have two types of costs: the manufacturing or operating costs for making or delivering the product; and the set-up costs. Whilst the manufacturing costs are easy to handle and report, one-off set-up costs are more of a problem for the marketer, because they often appear to destroy all profit for the first few years and therefore suggest that the product or project is not worth doing. This Application Note explains how Marketers can handle and report one-off set-up costs when justifying a new project such as in a Market Requirement Document (MRD) or New Product Proposal (NPP), and how to calculate and present the returns in such a way that management can understand and approve them


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Keywords: MRD, NPP, NPV, ROI, payback period, breakeven, one-off project costs, the business case, how is ROI calculated, 3 main ROI methods