marketing information management: e-portfolio

7/30/2019 Marketing Information Management: E-Portfolio

1/30

E-Portfolio Assignment

By: Sean Bindra

100170563


2/30

Descriptive Statistics Marketing and Finance

Market Share Metrics

Margins

Breakeven Analysis

Profit Dynamics Customer Lifetime Value

Distribution

Sales Force Management

Linear Demand

Promotion Profitability Advertising Metrics

Web Metrics


3/30

Quantitatively describing main features of acollection of data.

Examples include: mean, median, and mode.

Mean: arithmetic mean/average of a set of

data. Ex.) data set: 2,1,2,1,4

Mean = 2+1+2+1+4/5 = 2


4/30

Median: numerical value that separates higherhalf of sample from lower half. Ex.) data set: 2,4,6,8,10

Median = 6 Mode: value that occurs most often.

Ex.) data set: 2,2,3,1,5,2

Mode = 2


5/30

Provides insight into the overall financialcondition of a firm and analyzes potentialinvestments.

Net Profit = sales costs Ex.) If Tom made revenue of $5,000 and his costs

totaled $2,000, what is his net profit? Net Profit = $5,000 - $2,000 = $3,000

Return on Investment = net profit/investment Ex.) If Toms net profit is $5,000 and he invests$2,500 into his business, what is his ROI? ROI = $5,000/$2,500 = 2.0 %


6/30

Return on Sales = net profit/sales revenue Ex.) What is Toms ROS?

ROS = $3,000/$5,000 = 0.60 %

Earnings Before Interest and Taxes = netprofit + interest payment + taxes Ex.) Tom paid interest of $400 and taxes of $100.

What is Toms EBIT? EBIT = $3,000 + $400 + $100 = $3,500


7/30

Measures the sales of a brand or product relativeto the overall size of a market.

Unit market share = unit sales/ total market unitsales. Ex.) If there are 100 widgets sold in the country and

company A sells 50 of them, then the unit market share is:50/100 = 0.2%

Revenue market share = sales revenue/total

market sales revenue. Ex.) If company A makes $100, while companies B, C, D,

& E make a combined $900 in revenue, then company Asrevenue market share is: 100/1000 = 0.10%


8/30

Brand Penetration = # of people who boughtspecific brand/defined population.

Category Penetration = # of people who

bought any brand/defined population. Share of Penetration = brand penetration

/category penetration. Ex.) 500 households buy Nike shoes while 2,000

households buy at least one style of product fromthe Nike category. Therefore, the share ofpenetration for Nike shoes is: 500/2,000 = 0.25%


9/30

ManufacturerDistributorWholesalerRetailer Customer.

Selling Price = cost to produce + margin Ex.) If selling price is $50 and the cost is $20, then the

margin is: $30 $50-$20 = $30

Other key formulas: %margin = $margin/selling price Selling Price = cost/(1- %margin) Cost = selling price(1 - %margin) Markup% = selling price cost/margin Selling Price = cost(1 + markup%)


10/30

Determines the point at which revenue received =the costs associated with receiving that revenue.

Total Costs = total fixed costs + total variable

costs.

Total Contribution = total revenue total variablecosts.

Profit = total contribution total fixed costs.


11/30

Breakeven Formulas: Unit Breakeven = fixed cost/unit contribution.

Revenue Breakeven = fixed cost/contribution

margin %. Revenue Breakeven = breakeven units*unit price.

Breakeven Units = $breakeven/unit price.

Target Profit Breakeven = (fixed costs + target

profit)/contribution margin %.


12/30

Financial benefit realized when the amount ofrevenue gained exceeds the expenses, costs andtaxes.

Target Volume in Units = (fixed cost + profitobjective)/selling price variable cost.

Target Volume in Dollars: computed by takingthe solution from above formula and dividing it bythe selling price.

Target Revenue = unit target volume*selling price


13/30

Ex.) A product sells for $20, costs $5 to make, and

company has fixed costs of $30,000. How manyproducts must be sold to reach target profit of

$30,000? Target Volume = ($30,000 + $30,000)/($20 $5) = 4000

A product sells for $40, costs $10 to make, andcompany has fixed costs of $30,000. How many

dollars worth of the product must be sold to reachtarget profit of $60,000? Target Revenue = ($30,000 + $60,000)/($40 $10)/$40 =

3000


14/30

Discounted sum of all future customer revenuestreams (-) product, servicing, and remarketingcosts.

Assume: $M: contribution

$R: retention spending per period per activecustomer

r: retention rate

d: discount rate


15/30

CLV = [$M $R] x [(1 + d) / (1 + d -r)]

Ex.)

An Internet service provider charges $20.00 per

month. Variable costs are $1.00 per month. Theattrition rate is 0.5% per month with marketingspending of $5 per year. With a monthly discountrate of 1%, what is the CLV for a customer we plan

on acquiring? $M = $20.00 -$1.00 = $19, $R = $5/12 = $0.42, r = 0.995, d = 0.01

CLV = [$19 $0.42] x [(1+.01)/(1+.01-0.995)]

CLV = $1,251


16/30

Purpose: - To understand sales dynamics in retailchannel. Helps in making right decisions whereexpansion and growth strategies are concerned.

Numeric Distribution = (# stores that stock abrand)/(total stores in relevant market)

All Commodity Volume = (total sales of storescarrying brand) / (total sales all stores)

Product Category Volume = (tortilla sales of storescarrying Madres) / (tortilla sales all stores)


17/30

Outlet All Sales All ShoeSales

Baley SKUsstocked

Finley SKUsstocked

Store 1 $100,000 $1,000 5ct, 23ct 10ct, 21ct

Store 2 $70,000 $400 12ct 24ct

Store 3 $40,000 $500 5ct, 23ct n/a

Store 4 $20,000 $200 n/a 10ct, 21ct


18/30

Numeric Distribution of Baley is: (3) / (4) = 75%

All Commodity Volume of Baley is: ($100k + $70k + $40k) / ($100k + $70k + $40k + $20k)

= 91.3%

Product Category Volume of Baley is: ($1000 + $400 + $500) / ($1000 + $400 + $500 + $200)

= 90.5%


19/30

Workload = Current Accounts (#) * Average timeto service account + Prospects (#) * Time trying toconvert prospect to sale.

Ex.) The sales territory of Magma has 20current accounts requiring 10 days of supportper year and 40 prospects. It is estimated to

take 15 hours in the sales process for phoneand on-site follow-up. The yearly workload is:

(20 * 10 ) + (40 * 15 / 8) = 150 + 75 = 275 days


20/30

Sales Potential = Number of Possible Accounts *Buying Power ($)

Ex.) A company has determined that there are 200doctors in 6 cities that could be a source ofbusiness. Of those, 100 are cardiologists, with anavg. potential account value of $45K, and 100rheumatologists with an avg. potential account

value of $30K. The sales potential is:= (100 * $45,000) + (100 * $30,000)

= $7,500,000


21/30

Sales Goal formulas: Historical = Share of prior year sales (%) * Overall

objective ($)

Sales Potential = Share of sales potential (%) *Overall objective ($)

Historical + Inc = Prior year + Share of salespotential (%) * Overall increase objective ($)

Weighted = Historical * Weight + Sales Potential * (1 Weight)


22/30

Relationship between quantity and price islinear.

Quantity = (Slope * Price) + MWB

Maximum Willing to Buy = (Quantity Slope)* Price

Maximum Reservation Price = MWB / (-

Slope Profit Maximizing Price = (Unit Cost +

MRP)


23/30

Ex.) We observe that at a price of $6, a quantityof 8 is sold and that at $5, 10 units of a productare sold. Compute the slope, quantity, MWB,

MRP, and PMP. Slope = (8 - 10) / (6 - 5) = - 2

(Quantity) 10 = (slope) -2 *(price) 5 + MWB, so MWB= 10 + 10 = 20

MRP: 0 = 20 5*price = $4 (solving for price at whichwe sell 0 units)

PMP = (8 + 4) = $12 (assuming unit cost = $8)


24/30

Lift (%): measures incremental sales generatedas percentage of baseline sales.

Cost of Incremental Sales = Marketing spend($)/ incremental sales ($,#)

Return on Marketing Investment =(incremental sales*contribution margin-marketing spending)/marketing spending


25/30

Coupon Redemption Rate = couponsredeemed/coupons distributed

Cost per Redemption = coupon face amount +redemption charges

Percentage Sales on Deal = Sales withtemporary discount/total sales


26/30

Impressions = Exposures = Opportunities toSee

Rating Points: impressions as a % of

population. Ex.) If a TV ad is shown 2 times and that show is

watched by 7,000 people out of a population of100,000, that advertisement would generate 35 rating

points (5 x 7,000 / 100,000). Gross Rating Points = impressions/total

population


27/30

Cost per Impression: monitored to measurethe cost efficiency of campaigns.

Calculated as follow: cost of

advertising/impressions generated Ex.) If there are 10,000 impressions which are

generated from $500 of costs, then cost perimpression is: $500/10,000 = $50.

Share of Voice = company impressions/totalimpressions in market


28/30

Hits: number of file requests received by theserver is counted.

Page-views: amount of times a page is

requested by the server. Visitors: amount of different users to a site.

Click-through Rate = click through(#)

/impressions determines how effective internet advertising is.


29/30

Cost per Click = total cost/# of clicksgenerated refers to amount paid for each click that is generated.

Cost per Order = total cost/# of orders placed refers to the cost that is paid for each order Cost per Customer Acquired = total cost/# of

customers acquired

Bounce Rate = visits that access only a singlepage/total Visits to the Website specifies how effective a company is at producing

relevant traffic


30/30

marketing information management: e-portfolio

Documents