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Rafael AlemanMKTG 353-02

November 29, 2012In Class review for the final:

It will be done during the last week of semester.

From now on focus on your final examThe only way to be prepared is to PRACTICE, PRACTICE, PRACTICE!!!

Focus on how to calculate the costs, margins, selling price, markup on cost and markup on price.While taking your capstone class you will remember her since it takes all the information.

Question #4 will be on your final. You will have to come up with a price that guarantees you cover yourcost.THE TABLE WILL NOT BE GIVEN, IT WILL BE ONLY WORDING.UNDERSTAND PROBLEM AND WORDING TO SET UP THE TABLE. 30-40% OF GRADE.

Formula is on page 2 of the reading material.Marginal Analysis and Break-even

Product manager is responsible for pricing product throughout the channels.

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How will you sell it to the distributor?

If you are able to sell 10,000 of the device

$26,98010,000$24,000

Regional Sales Manager for Ocean Spray.All major grocery stores are selling product.He has to bring laptop and have tons of slides ready and ask for 15-30 minute window for apt.They will show new advertising campaign.Sales GraphIncreased Sales

The tables show a shift from push strategy to pull strategy.THIS CASE STYLE WILL BE ON FINAL EXAM! PAGE 5.

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Unit contribution is same as mark up.MarginMark upMark onGross MarginGross Profit

Unit contributionPriceCostPriceVariable Cost

For page 5 answer

Dont type in number, use formulas so that you will get a more exact number.

Put your percentage in a way that is visible instead of making it invisible inside the formula (hiding/ buryingin formula)

At break-even point you are not making money but at least you are not losing money, you will be able tosustain.

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You need to sustain break-even point. When you break even to evaluate advertising campaign you evaluatepromotional strategy. Its not how cute or fun the campaign is but if it makes profit or break even.

Formula is on page 7

Formula:

Unit Contribution = Unit Price - Unit Variable Cost

Breakeven in Units = Total Fixed Cost / Unit Contribution

Incremental Breakeven Units = Additional Fixed Cost / Unit Contribution

Incremental volume required to justify expenditure = Incremental Expenditure/unit contribution

Incremental Market Share =

Incremental Breakeven Units / Projected Total Market

Profit impact = Unit Contribution * Sales Unit Fixed Cost

Target Sales Volume =(Present Fixed Cost + Additional Fixed Cost + Projected Profit) / Unit Contribution

Market share percentage

Brand sales / Industry Sales

Remember correct number of zeroes when entering millions or billions

According to our forecast, will we make money first year?Yes, because break even is at 11% and we are scheduled to make 13%

You have to find these 4 pieces of information to come up with proposal for mktg strategy.1) What is unit contribution of this product2) How many product do I need to sell to Break Even3) What is my target market share4) What is the current profit they are making right now.

If industry is expanding what should you do next year? Sell more.Increase advertisingPromotions (Price, Product, distributorsReduce price to stimulate demand