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Midterm

MKT300 Midterm: MKT 300 Midterm Review


Department
Marketing
Course Code
MKT 300
Professor
Armand Gervais
Study Guide
Midterm

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Wednesday, September 9, 2015
MKT 300
Week 1- Lecture
CHAPTER ONE
What is a Metric?
-A metric is a measuring system that quantifies a trend, dynamic or characteristic.
Practitioners use metrics to explain phenomena, diagnose causes, share findings and
project the results of future events.
-Metrics make it possible to compare observations across regions and time periods
-Can help a firm maintain a productive house on customers and markets
-They can help to identify the strengths and weaknesses in both strategies and
execution.
1

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Wednesday, September 9, 2015
CHAPTER THREE
Key Terms
METRIC
CONSTRUCTION
CONSIDERATION
PURPOSE
Unit Margin
What are the standard units
in the industry?
May not reflect contribution
margin if some fixed costs
are allocated.
Determine value of
incremental sales.
Guiding pricing and
promotion.
Margin (%)
May not reflect contribution
margin if some fixed costs
are allocated
Compare margins across
different products/sizes/
forms of product.
Determine value of
incremental sales
Guide pricing and
promotion decisions.
Channel
Margins
Distinguish margin on sales
(usual) from markup on cost
(also encountered).
Evaluate channel value
added in context of
selling price.
Calculate effect of price
changes at one level of
channel on prices and
margins at other levels in
the same channel
(supply chain).
Average Price
per Unit
Some units may have greater
relevant from producers’
perspective than
consumer (ex. ounces of
shampoo vs. bottles)
Changes may not be result of
pricing decisions
Understand how average
prices are affected by
shifts in pricing and
product mix
Price per
Statistical
Unit
Percentage SKU mix should
correspond over medium-
term to actual mix of sales.
Isolate effect of price
changes from mix
changes by
standardizing the SKU
mix of standard unit.
2

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Wednesday, September 9, 2015
METRIC
CONSTRUCTION
CONSIDERATION
PURPOSE
Price per
Statistical
Unit
Percentage SKU mix should
correspond over medium-
term to actual mix of sales.
Isolate effect of price
changes from mix
changes by
standardizing the SKU
mix of a standard unit
Variable and
Fixed Costs
Variable costs may included
production, marketing and
selling expenses. Some
variable costs depend on
units sold; others depend on
revenue.
Understand how costs
are affected by changes
in sales volume.
Marketing
Spending
Can be divided into fixed and
variable marketing costs
Understand how
marketing spending
changes with sales
Contribution
per Unit
Ensure that marketing
variable costs have not
already been deducted from
price.
Understand profit impact
of changes in volume.
Calculate break-even level
of sales
Contribution
Margin (%)
Ensures that variable costs
are consistently based on
units or revenue, as
appropriate.
Same as above, but
applies to dollar sales.
Break-Even
Sales Level
Variable and fixed cost
estimates may be valid only
over certain ranges of sales
and production.
Rough indicator of
project attractiveness
and ability to earn profit.
Target
Volume
Variable marketing costs
must be reflected in
contribution margins.
Sales increase often require
increased investment or
working capital.
Ensure that unit sales
objectives will enable
firm to achieve financial
hurdle rates for profit,
ROS or ROI
3
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