Marketing Arithmetic Exercise Answers

School: Academy of Healing Arts Massage and Facial Skin Care           Price: $10.00 USD

Document Description

Financial Analyses
Have you ever wondered why a 16-ounce beverage costs only a little more than the 12- ounce serving? Chances are that the company producing the beverage conducted a financial analysis to determine the cost of the beverage versus what the market would bear as far as price.
An important aspect of looking at alternative courses of action in marketing strategy is performing a financial analysis. Before deciding on a course of action, marketing professionals need to understand the economic consequences of each alternative course of action. The Harvard Case Study, “Note on Marketing Arithmetic and Related Marketing Terms” by Star, Heskett, and Levitt (1974), defines several financial terms and explains formulas you might use to calculate the effects of changes to a marketing program. For example, by using the equations in this article, you could determine how many additional units of a product your company would need to sell to maintain profitability if you increase the var

Written By

Studypool Tutor
Academy of Healing Arts Massage and Facial Skin Care
MARKETING ARITHMETIC EXERCISE ANSWERSMarketing Arithmetic Exercise AnswersStudent NameCourse TitleInstructor NameUniversity Name1MARKETING ARITHMETIC EXERCISE ANSWERS21.By Increasing the Retail Margin/unit, manufacturers selling price and Wholesale sellingprices decreases. For example, increases Retail Margin/Unite by 10% from 33% to 43% beloweffect can be seen. Whole Selling Price drops from $0.67 to $0.57 and manufacturers sellingprice drops to $0.50 from $0.59.Margin Structure Factors:Variable Cost Factors:Retail Price:Retail Margin/Unit:Wholesale Margin/Unit:$1.00Variable Mfg. Cost/Unit:Shipping, etc./Unit:Commissions:$$Wholesale Selling Price:$0.57Manufacturer's Selling Price:$0.5043%12%0.090.0210%If the retail price remains fixed at $1.00 and there was an increase in retail and wholesalemargins it would lead to a reduction in the manufacturers selling price. If the company increasesthe retail or wholesale margin it is also increasing the profit available to the company because itis calculated on the retail price. However, with no change in retail price because it remains fixed,the manufacturer would have to reduce its selling price in order to provide the extra benefit to theretailer or wholesaler.Unit contribution for Brand X:Retail Selling Price = $1.00Retail Margin = 33% ($0.33)Wholesaler Margin = 12% ($0.08)Brand X Selling Price = 1.00 (.33 + .12) = .59Variable Costs = (Mnf) .09 + (Ship
lock_open Buy Document

Reviews from Students

Studypool Student
"Excellent work as usual"
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1823 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors