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Marketing MetricsChapter 1:IntroductionChapter 2: On Mark Ups & Margins
Introductory Chapter                      ℘ What are Metrics?                     - A Measuring System      - Helps to Qua...
Introductory Chapter            ℘ Why is it Important?“ When you can measure what you’re speakingabout, and express it in ...
Introductory Chapter℘    Marketing Metrics: Opportunities, Performance &                   Accountability- Measure Opportu...
Introductory Chapter    ℘ Choosing the Right Numbers - Portfolio of Metrics: Diversity is key & ability to measure from   ...
Marketing MetricsChapter 1: IntroductionChapter 2: Market ShareChapter 3: On Mark Ups & Margins
On Mark-ups and Margins..       The purpose of a business is to create a customer – Peter DruckerWe have to acknowledge th...
On Mark-ups and Margins..A mark-up expresses:The profit component of a product as a percentage of the cost price and isgen...
On Mark-ups and Margins..               Mark-up belongs to cost, Margin belongs to sales.Example:If you buy something for ...
The Key to Margins..We use margins to determine the value of incremental sales, and to guidepricing and promotion decision...
Marketing Matters - Marketing Metrics Training Series (Introduction and Part 1: Mark Ups and Margins)
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Marketing Matters - Marketing Metrics Training Series (Introduction and Part 1: Mark Ups and Margins)

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This presentation serves as the introduction as well as Part 1 (Mark Ups and Margins) for the Marketing Metrics Training Series by a company called Marketing Matters. Marketing Matters is a marketing strategy consultancy based in KwaZulu Natal, South Africa. The training series is based on the book, "Marketing Metrics: 50+ Metrics Every Executive Should Master" by Farris, PW et al. You can contact us on (+2731) 764 3919 or visit our website - www.marketingmatters.co.za - for more contact details.

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Marketing Matters - Marketing Metrics Training Series (Introduction and Part 1: Mark Ups and Margins)

  1. 1. Marketing MetricsChapter 1:IntroductionChapter 2: On Mark Ups & Margins
  2. 2. Introductory Chapter ℘ What are Metrics? - A Measuring System - Helps to Quantify Trends/ Dynamic Characteristics - Use it to Explain Phenomena - Use it to Diagnose causes etc.It’s imperative to understand the concept and use of metrics, as it helps you to evaluate the strategies that you formulate
  3. 3. Introductory Chapter ℘ Why is it Important?“ When you can measure what you’re speakingabout, and express it in numbers, you knowsomething about it”- W. Thomson - Business Leaders: Quantify business opportunities and threats.“ If you can’t measure it, you can’t manage it”
  4. 4. Introductory Chapter℘ Marketing Metrics: Opportunities, Performance & Accountability- Measure Opportunities: investment size needed torealise the opportunity, needs to bedetermined.- Quantify the ‘4Ps’: to what extent is the moneybeing used effectively? Marketers are alsoheld accountable for the ramifications of theirdecisions. “A leader who uses resources appropriate to the challenge at hand, will win” Sun Tzu
  5. 5. Introductory Chapter ℘ Choosing the Right Numbers - Portfolio of Metrics: Diversity is key & ability to measure from different angles ℘ Mastering Metrics- Skills are mastered over time- Practice is crucial
  6. 6. Marketing MetricsChapter 1: IntroductionChapter 2: Market ShareChapter 3: On Mark Ups & Margins
  7. 7. On Mark-ups and Margins.. The purpose of a business is to create a customer – Peter DruckerWe have to acknowledge the fact that a business cannot survive unless it has both a marginand a customer.As marketers, it is imperative that we know the margins for almost all themarketing decisions that we make. These margins represent a key factor inexpressing: • return on investment, • calculating earnings forecasts, • and analysing the future profitability of a new product.Bearing this in mind, we have to mention that margins can be divided into sub-sections: • Percentage Margins • Unit Margins.
  8. 8. On Mark-ups and Margins..A mark-up expresses:The profit component of a product as a percentage of the cost price and isgenerally used in setting selling prices.A margin expresses:The profit component of a product as a percentage of the selling price, and isgenerally used to calculate the gross profit from a turnover amount.It is important to remember (when talking about the percentage profitcomponent) to specify which method you are referring to. • "I set a 50% mark-up on those products" • "I am achieving a 30% margin on those products"
  9. 9. On Mark-ups and Margins.. Mark-up belongs to cost, Margin belongs to sales.Example:If you buy something for R10 and sell it for R20, the profit made was R10In this case the Mark Up on cost has been:R10 profitR10 Cost X 100 = 100%But the Margin on sales has beenR10 profitR20 Sales X 100 = 50%
  10. 10. The Key to Margins..We use margins to determine the value of incremental sales, and to guidepricing and promotion decisions.Margins are typically the difference between your sales price and your costprice, and it can be expressed either as a currency (Unit Margin) or as apercentage (Percentage Margin)Example:A company manufactures model boats: Unit Selling price: R50, Unit Cost: R25Unit Margin (R) = Selling price per unit (R) – Cost price per unit (R)R25 = R50 – R25Percentage margin (%) = Unit Margin (R) / Selling Price per Unit (R)50% = R25/R50

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