MKTG647 Homework

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Zvynab

Business Finance

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Marketing Costs
1. Identify 10 specific marketing activities that incur costs. Five of these marketing activities should be fixed costs, and five should be variable costs. Explain the difference between fixed and variable costs in marketing.

2. When setting a price, which is more important: unit cost or variable cost? Explain.

3. Are marketing costs programmed or committed costs?

4. What is the sunk cost fallacy, and what type of cost does it refer to?

Contribution Analysis

Product ……... Contribution Margin

A …………….. 0.2

B ……………….. 0.5

C …………………… 0.75

1. Explain what the differences in contribution margin mean for each product. If you were to spend $100,000 in marketing costs for each product, what are the ramifications to break-even analysis?

2. Based on the above information alone, which of the three products is more likely to compete based on price? Which product is more likely to compete based on non-price factors? Explain your rationale.

3. Why is contribution analysis a useful tool to master in strategic marketing?

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Explanation & Answer

Find attached.

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Running head: MARKETING

Marketing
Student’s Name
Affiliation Institution

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MARKETING
1. Identify 10 specific marketing activities that incur costs. Five of these marketing
activities should be fixed costs, and five should be variable costs. Explain the
difference between fixed and variable costs in marketing.
The following are examples of fixed cod; Training, salary, catalogs, promotion, and
payroll taxes. On the other hand, example of variable cost Print Media, travel costs, Wages,
Commission on Sales, bonuses, and advertising cost. The difference between variable and fixed
costs in marketing is that fixed cost are cost that remains same despite the number of units sold.
Good example of this are salaries, training cost as well as payroll taxes. On the other hand,
variable cost comprise of costs that varies depending on the amount of units sold as such in the
cases of commission and bonuses.
2. When setting a price, which is more important: unit cost or variable cost? Explain.
Organizational pricing is usually based on the target c...


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