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Application of Marketing Math
Reference Case:--
Basic Quantitative Analysis for marketing
Low – Tech Marketing Math (Harvard Business School)
Presented by:--
Aritra Banerjee (23/008)
Saakshi Nayak (23/028)
Cost - Revenue Analysis
For the purpose marketing analysis of any product or services we need to have to determine :--
 Price
 ( cost + margin)
 Volume
 Distribution ( selling and distribution cost)
 Competitive forces
Cost- Types
1. Fixed cost : Remains constant irrespective of volume of production or sales
a. Total fixed cost (TFC) TFC= K (K: constant)
b. Average fixed cost ( TFC/ number of units produced or sold)
k
Pic source : http://www2.owen.vanderbilt.edu
Cost- Types
Variable cost: a cost that varies with the level of output.
VC= f(q)
Amosweb.com
Total Cost
Total Cost = Total Fixed Cost + Total Variable Cost = k + f(q)
Economics .about.com
Revenue and Profit
Sales (revenue) xxxxxxx
Less: Variable cost (xxxxx)
Contribution xxxxxx
Less: Fixed Cost (xxxxx)
Profit/loss xxxxxx
Economics .about.com
Break Even Point
 The break-even point (BEP) is the point at which total cost and total revenue are equal.
 There is no profit no loss
 An indicative tool which helps in making marketing strategies.
Mathematically represented as:--
Break Even Volume = Total fixed cost
contribution per unit
ISO Profit Curve
2500
2000
1500
1000
500
2 4 6 8 10
Variable cost
ISO curve: same level of profit at every
point of the curve.
volume
price
Selling And Distribution Margin
 Manufacturer’s margin($3.50) = Manufacturer's selling price to distributers($7.5) -
manufacturing cost($40)
 Wholesalers margin($1.20) = Wholesalers selling price to retailers($8.70) - price paid to
manufacturer($7.50)
 Retailer’s margin = Retailer's selling price to consumers($10.00) - price paid to
wholesales($8.70)
Application of marketing math

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Application of marketing math

  • 1. Application of Marketing Math Reference Case:-- Basic Quantitative Analysis for marketing Low – Tech Marketing Math (Harvard Business School) Presented by:-- Aritra Banerjee (23/008) Saakshi Nayak (23/028)
  • 2. Cost - Revenue Analysis For the purpose marketing analysis of any product or services we need to have to determine :--  Price  ( cost + margin)  Volume  Distribution ( selling and distribution cost)  Competitive forces
  • 3. Cost- Types 1. Fixed cost : Remains constant irrespective of volume of production or sales a. Total fixed cost (TFC) TFC= K (K: constant) b. Average fixed cost ( TFC/ number of units produced or sold) k Pic source : http://www2.owen.vanderbilt.edu
  • 4. Cost- Types Variable cost: a cost that varies with the level of output. VC= f(q) Amosweb.com
  • 5. Total Cost Total Cost = Total Fixed Cost + Total Variable Cost = k + f(q) Economics .about.com
  • 6. Revenue and Profit Sales (revenue) xxxxxxx Less: Variable cost (xxxxx) Contribution xxxxxx Less: Fixed Cost (xxxxx) Profit/loss xxxxxx Economics .about.com
  • 7. Break Even Point  The break-even point (BEP) is the point at which total cost and total revenue are equal.  There is no profit no loss  An indicative tool which helps in making marketing strategies. Mathematically represented as:-- Break Even Volume = Total fixed cost contribution per unit
  • 8. ISO Profit Curve 2500 2000 1500 1000 500 2 4 6 8 10 Variable cost ISO curve: same level of profit at every point of the curve. volume price
  • 9. Selling And Distribution Margin  Manufacturer’s margin($3.50) = Manufacturer's selling price to distributers($7.5) - manufacturing cost($40)  Wholesalers margin($1.20) = Wholesalers selling price to retailers($8.70) - price paid to manufacturer($7.50)  Retailer’s margin = Retailer's selling price to consumers($10.00) - price paid to wholesales($8.70)