MKT-315-Introduction to Marketing
PEER RESPONSES
In 100 words each, kindly helprespond to the6 peer posts
Assessment Description
What is meant by marketing math in pricing? Discuss the significance of marketing math in overall marketing success. Provide an example that supports your ideas. In replies to peers, provide additional examples that support those posted by your peers.
Yakima Eatman
Marketing math is also significant to the pricing of a good because they use simple formulas to find important process points such as the average cost, (https://www.stubocu.com). Marketing math is what tell you whether your marketing is working. However, the right calculations are probably different than what you’ve encountered so for in business finance. Marketing is more like the price that a product can be purchased or sold at. An example could be customer engagement, the area of marketing metric consists of metric like conversions, retention and turnover. Another example could be sales data and performance are also important metrics to calculate the success of advertising and marketing approaches, (https://www.indeed.com).
Yulisa Gutierrez-Medina
Marketing math is in all business. It is math that is used to make out prices for the products that will be sold in the business. The owner buys product in bunches and depending on the products value at the cost that the owner got it the owner will develop the price they want to sell it. The owner adds up the material cost, labor cost, and the overhead cost that will then makeup to the price the owner wants to sell it to the consumers. For example, where I work at we have many cases, screen protects, charges, and headphones. The owner buys bunches for a very good price and he will sell it at a price like a home charger is $32 and if the customer is not happy with the price employees are able to drop the price to a reasonable price to $26 or even make bundles like buy 2 get one free where he not is also not losing profit. Marketing math has to be done very smartly because if things are just given at a very low cost the business will have not profit and eventually fail.
Nicholas McGee
The significance of marketing math allows businesses to gauge marketing contributions, the return on the investment (ROI), expense to revenue, determine the break-even point, manage budgeting, and more. It helps marketers and businesses to track the monetary standpoint of overall revenue in the long run, at a certain point of time, or for future calculations. This all depends on the competition, demand, and the needs of the distributors.
Profit can be measured by obtaining the total revenue (TR) minus the total cost (TC). For example, if Company A makes a TR of $11,000 weekly and TC of that week amounts to $7,000 a week, it would make a profit of $4,000 for that given week. Profit maximization in the long run is key to building a strong foundation for your business to thrive and price product more efficiently.
Understanding the law of demand helps businesses to increase the price of products and services more effectively by gauging the quantity demand without falling short and affecting revenue. For example, something priced at $1 selling 10 units will amount to $10, raising the price to $1.50 selling 8 units amount to $12, and a raise to $2 for 6 units amount to a total of $12, and so on.
Marketers use the break-even point (BEP) to help measure the effects on profit by utilizing this formula…BEP = Total Fixed Cost (TFC)/ [Unit Selling Price (USP) – Variable Cost Per Unit (VC)]. It allows marketers to understand the relationship between revenue and cost to estimate how many units need to be sold before profits begin. For example, Company B has a TFC of $16,000 per month with a USP of $16 and a VC of $8. Input formula… BEP = [16,000/(16-8)] = 2,000 per month.
Measuring price elasticity of demand (PED) is another marketing math strategy taken to determine the changes in price and quantity demand. This will tell marketers how elastic or inelastic their product is. Inelastic goods tend to be necessity while elastic goods tend to be luxury. The formula used to determine this is…PED = % change in quantity/% change in price. Getting a lower PED, means it is inelastic and tends to be a necessity. When a higher PED is calculated it is most likely an elastic or luxury product or service. For example, Product C goes from $20 to $25 the units sold at $20 was 300 and the units sold at $25 went to 240. When you input the formula… PED = (60 loss/300)/($5 difference/$20) = 2%/25% = 0.8 considering this product as a necessity due to the low PED score.
Reference:
GCU Academics – Business. (2018, November 30). V13 Price and Break Even Analysis [Video]. YouTube. https://youtu.be/xByyj_ubelY
Kaylin Stanley
Marketing math is the most important part of having any company become successful. This is important to know how much money you are able to make off the product being sold. There are many things that go into making the marketing math a success. The product must be at an affordable price for consumers but also enough for the company to continue to grow. When trying to figure out the math for how much to sell a product you must think of all possible outcomes. For example, if i have a new business of making tumblers i know that selling in bulk would be best. Knowing this i can now focus on how much i should sell them for. It must be a good deal for the customers and for my company to make a profit.
Nicholas McGee
The significance of marketing math allows businesses to gauge marketing contributions, the return on the investment (ROI), expense to revenue, determine the break-even point, manage budgeting, and more. It helps marketers and businesses to track the monetary standpoint of overall revenue in the long run, at a certain point of time, or for future calculations. This all depends on the competition, demand, and the needs of the distributors.
Profit can be measured by obtaining the total revenue (TR) minus the total cost (TC). For example, if Company A makes a TR of $11,000 weekly and TC of that week amounts to $7,000 a week, it would make a profit of $4,000 for that given week. Profit maximization in the long run is key to building a strong foundation for your business to thrive and price product more efficiently.
Understanding the law of demand helps businesses to increase the price of products and services more effectively by gauging the quantity demand without falling short and affecting revenue. For example, something priced at $1 selling 10 units will amount to $10, raising the price to $1.50 selling 8 units amount to $12, and a raise to $2 for 6 units amount to a total of $12, and so on.
Marketers use the break-even point (BEP) to help measure the effects on profit by utilizing this formula…BEP = Total Fixed Cost (TFC)/ [Unit Selling Price (USP) – Variable Cost Per Unit (VC)]. It allows marketers to understand the relationship between revenue and cost to estimate how many units need to be sold before profits begin. For example, Company B has a TFC of $16,000 per month with a USP of $16 and a VC of $8. Input formula… BEP = [16,000/(16-8)] = 2,000 per month.
Measuring price elasticity of demand (PED) is another marketing math strategy taken to determine the changes in price and quantity demand. This will tell marketers how elastic or inelastic their product is. Inelastic goods tend to be necessity while elastic goods tend to be luxury. The formula used to determine this is…PED = % change in quantity/% change in price. Getting a lower PED, means it is inelastic and tends to be a necessity. When a higher PED is calculated it is most likely an elastic or luxury product or service. For example, Product C goes from $20 to $25 the units sold at $20 was 300 and the units sold at $25 went to 240. When you input the formula… PED = (60 loss/300)/($5 difference/$20) = 2%/25% = 0.8 considering this product as a necessity due to the low PED score.
Reference:
GCU Academics – Business. (2018, November 30). V13 Price and Break Even Analysis [Video]. YouTube. https://youtu.be/xByyj_ubelY
Erica Tubens
In short, marketing math in pricing are prices of goods/services with intention of driving more consumer sales and revenue. There are many different tactics and methods that are used to drive sales, increase revenue, and to become the most chosen company/brand to a large number of consumers. From “Odd-Even Pricing” (ex. $19.95) to “Round Promotions” (ex. The dollar store), there is a wide variety of methods companies take to ensure they are getting their products out the door and services used. For example the company I work for, Kendra Scott, they are using Price Bundling more often than usual for the holidays where a consumer could pay one fixed price for 2 or more products instead of paying a discount percentage of each. This has been proven effective for recent consumers to aid in “thoughtless” gift giving for the holidays where the decision is made for them and therefore, easier to shop.
