Session 5 Flashcards
What is market share
Its the percentage of total market that your brand controls
Market shares calculations of sales
Your brand sales/total sales for all brands ($)
Market shares calculations for units
Your brand sales in unit sold/total sales for all brands in unit sold
What is Step down analysis
when we dont have all info we can estimate market share through step down analysis
step down calculations
!!
Definition of costs
money that you are spending
definition of revenue
money that is coming
Definiton of profit
revenue-profit
definition of profit margin
profit expressed as a percentage of revenue
What is fixed cost
costs that do not vary with how many units you make. Lease for factory
What is variable costs
costs that vary with how many units you make. Raw material. Retailers call is COGS
What is the formula for cost per unit
fixed cost/unit + variable cost/unit
What is the contribution margin
How much money from the sale is left after accounting for the variable costs.
This money can be used to cover paying off the fixed costs we invested in
What iis the formula for contribution per unit
= price per unit -variable costs per unit
What is the formula for contribution margin
price - variable costs/price (per unit)
what is the profit per unit formula
price per unit- all costs (fixed and variable)
What is the profit margin % formula
price - all costs/price (per unit)
whats the markup on cost
how much price increased by the retailer, relative to what they paid to distributor
breakeven
when costs= revenue
price elasticity
measure how responsive demand is to change in price
PE<1
PRICe inelastic (gasoline)
PE=1
unit elasic. changing price has no impact on profit
PE>1
Price elastic. slope is less steep. raise price, lower profits. (commodities, weak brands)
