MKT 300 Study Guide - Profit Margin, Customer Retention, Net Present Value
11 Dec 2013
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How to read it r ~ 1= extremely high positive correlation between the measures. r ~ zero =no correlation. Ex) 0. 20 very weak positive relationship. r ~ -1 =extremely high, inverse/-ve relationship btwn measures: one is high, the other is low. Ex)correlation coefficient of 0. 7 ^2 is sub% explains. Expected sales quantity in units: exp [mkt size x mkt share] Variances between expected (sometimes called standard costs) and actual costs and prices are called. Ex) marketing program costs or manufacturing & general overhead costs. Price/cost variance: diffference between market share * actual market size* exp cm. Market share variance: : diffference between market size * exp market share* exp cm. Market size var: diff btwn sales in quantity x exp cm. Total var = cm+mkt share + mkt size + fc var. Rate of return: irr(investment:last cf) npv 1 cf: npv(rr,cf1-end) [beginning of year 2, all past costs are sunk and common to whatever action you take next.
