Finance Business Marketing
Finance - Business - Marketing
Marketing Analytics
1. What do you think is the proper role of metrics for marketers? How should we use metrics, and how do we decide which metrics are appropriate?
Answer half a page or less.
2. Wally’s Widget World is an online retailer that makes and sells widgets. There are three models of widgets, each with its own cost of materials and labor.
|
Model |
Percent of sales |
Materials cost |
Labor cost |
Selling price |
|
Econowidget – base-level widget for the budget-conscious widget user |
35% |
$3.50 |
$1.50 |
$6.99 |
|
Superwidget – adds additional feature for the more demanding widget user |
45% |
$4.00 |
$1.75 |
$8.99 |
|
Widget Supreme – for the more discerning and sophisticated widget user |
20% |
$5.25 |
$2.00 |
$11.99 |
The widgets are all the same size and approximate weight, so shipping costs for each widget (regardless of model) are $2.50, and customers are charged $3.99 per widget. Wally’s Widget World has monthly costs below:
Rent $10,000 Utilities 2,000 Administrative salaries 6,000 Overhead/supplies 1,000
In addition, Wally’s budgets $3,000 each month on banner ads and search-engine marketing. Assuming the percentage of sales for each product in the product line remains constant, perform the following analyses:
a. Calculate the break-even volume
b. Calculate the break-even revenue
c. Wally’s Widget World has a monthly target profit of $5,000. What should be the target volume and revenue for this objective?
d. Is this a viable target profit? Explain using your calculations. Give an example of another target profit that you think would work and explain why.
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Rating:
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Solution: Finance Business Marketing