Market-Based Management. What typifies successful businesses?

Slides:



Advertisements
Similar presentations
Quick Quiz 3.04.
Advertisements

Market-Based Management, 4th edition
Market-Based Management and Financial Performance Chapter Sixteen M arket-Based Management, 4th edition.
 Copyright 1999 Prentice Hall 10-1 Chapter 10 Pricing Products: Pricing Considerations and Approaches PRINCIPLES OF MARKETING Eighth Edition Philip Kotler.
Performance Metrics and Strategy Implementation Chapter Fifteen M arket-Based Management, 4 th edition.
Marketing Metrics and Marketing Profitability
Cost-Volume-Profit Analysis and Planning
Elasticity of the Return on Advertising and ROME Ted Mitchell.
Building Human Capital OS352 HRM Fisher January 12, 2005.
Breakeven Analysis Part 2 Click here for Streaming Audio To Accompany Presentation (optional) Click here for Streaming Audio To Accompany Presentation.
Contemporary Engineering Economics, 4 th edition, © 2007 Estimating Profit from Production Lecture No. 31 Chapter 8 Contemporary Engineering Economics.
Contemporary Engineering Economics, 4 th edition, © 2007 Cost-Volume-Profit Analysis Lecture No. 30 Chapter 8 Contemporary Engineering Economics Copyright.
Cost Based Advertising
Market-Based Management
C H A P T E R 6 Monitoring Performance in Cost, Profit and Investment Centers.
The Basics of Cost-Volume-Profit (CVP) Analysis Contribution margin (CM) is the difference between sales revenue and variable expenses. Next Page Click.
BUILDING THE PRICE FOUNDATION C HAPTER 13. What is a Price?  Barter Price as an Indicator of Value  Value-pricing Price in the Marketing Mix  Profit.
Market-Based Management
Market-Based Management, 4th edition
Setting the Right Price. Lesson Goals: Learn how to: –Calculate total costs –Calculate a profit margin –Use break-even analysis Identify the difference.
Chapter 3 Cost/Volume/Profit Relationships
Break-Even and Cost-Volume-Profit Analysis
Cost Based Advertising Ted Mitchell. Three Methods for Setting Advertising Budget Cost Based Advertising Competitive Based Advertising Customer Based.
Explaining the Different Costs, and Profits on The Dashboard of The Marketing Machine Ted Mitchell.
Competitive Advantage and Transfer Pricing Gerald Smith, D.B.A.
Market Segmentation and Customer Relationship Marketing Chapter Five M arket-Based Management, 4 th edition.
The importance of Gross margin Example 1: Sales price ok, sales volume ok compared to the size of the company: Sales income100 units x
Direct Marketing Analysis Basic DM Financial Analysis Transaction Costs (Exh. 20-2) –Variable cost of filling an order Contribution Per Order –Revenue.
Accounting 3020 Chapter 12 – Segment Reporting, Decentralization, and Balanced Scorecard.
Chapter 3 Cost, Revenue, and Income Behavior
Market-Based Management, 4th edition
Ashutosh Dash. Objective of the case: Explores How a cost system can help support a firm's decision to change strategies The organizational linkage between.
Chapter 2 Financial Aspects of Marketing Management
Factors that Makeup Prices Analyzing Revenues, Costs, & Expenses.
Chapter 16 Objectives  Marketing Profitability Metrics  Marketing Profits and Financial Metrics  Marketing Profits and Company Stock Price MBM6 Chapter.
Lecture 3 Cost-Volume-Profit Analysis. Contribution Margin The Basic Profit Equation Break-even Analysis Solving for targeted profits.
PROFITABILITY RATIO SASHA AND TIKA. WHAT IS PROFITABILITY? it measures the profit in relation to other variables. Such as sales turnover. The value of.
10-1 Chapter 10 Pricing Considerations and Approaches.
Chapter 7 Understand the alternatives in conventional costing systems.
Cost-Volume-Profit Analysis. The Contribution Format Used primarily for external reporting. Used primarily by management.
Chapter Five Market Segmentation and Segmentation Strategies.
3 C Profitability Analysis and Planning hapter
Financial Aspects of Marketing Management Graduate Marketing Certificate Program Chip Besio Cox School of Business.
Pricing Strategy.  Focus on the value of your product / service delivers  Value = perceived benefits Price Know your competitor Reward staff for sales.
Financial analysis Group 3 Fyeeovoye Hendrina Wilhelmina.
Operating Leverage Financial Leverage  2002, Prentice Hall, Inc.
Offensive Strategies Chapter Twelve M arket-Based Management, 4 th edition.
MODIFIED BREAKEVEN ANALYSIS TOTAL COST CURVES: COSTS AVERAGE COST CURVES: COSTS FIXED COSTS VARIABLE COSTS TOTAL COSTS QUANTITY AVERAGE TOTAL COSTS AVERAGE.
Chapter Two Marketing Performance and Marketing Profitability.
Chapter 17 Cost-Volume-Profit Analysis
Cost-Volume-Profit Analysis
Chapter 25 price planning Section 25.1 Price Planning Issues
Niche v Mass Marketing.
Stericycle Marketing ROI Vs. Operating Income
Factors that Makeup Prices
20 Monitoring Performance in Cost, Profit and Investment Centers
Contemporary Selling Sales Math Dr. Carlos Valdez
Operating Leverage Financial Leverage Ch. 15: Analysis and
AMIS 310 Foundations of Accounting
Cost Behavior and Cost-Volume-Profit Analysis
Supply Chain Management
Lecture on Building the Price Foundation
The Basic Operating Statement MKT 210
Lesson 15-2 Determining Breakeven
Financial and Other Leverage
price quantity Total revenue Marginal revenue Total Cost profit $20 1
Firms in Competitive Markets
Lesson 15-2 Determining Breakeven
Cost Volume Profit Analysis
Presentation transcript:

Market-Based Management

What typifies successful businesses?

Success/Profitability Drivers 1. Market attractiveness 2. Competitive advantage 3. Market orientation

Marketing Orientation Requires…… Market-based organizational structure Market-oriented employees Market-oriented culture Market-based management systems

A Market-Based Management System... Tracks and communicates both internal and external market performance metrics. Measures market-level profitability.

External Performance Metrics Indicators of future revenues and profits Customer awareness Customer interest Rate of product trial Degree of customer satisfaction/dissatisfaction Customer perceptions of quality and value Market share Customer retention Revenue per customer

Internal Performance Metrics Sales ROI Net profits

Market-Level Profitability How do marketing expenses impact a firm’s profitability? Net Marketing Contribution (NMC)= Market Demand Market Share Price/ Variable Cost/ Unit xx- Marketing Expenses -

Impact of NMC on net profit…. Net Profit= NMC - Operating Expenses Overhead Expenses -

Breakdown of NMC Formula Market x Market x (Price/unit - VC/unit) - Mkt Expenses Demand Share Mkt Demand (in units) x Mkt Share = Sales volume in units Sales vol. in units x Price/unit = Sales volume in dollars Price/unit - VC/unit = Contribution margin (CM) Price/unit x %margin = Contribution margin/unit Price/unit - contribution margin/unit = Variable cost/unit

Impact of NMC on Marketing Strategy... Market Demand Market Share Price/ Variable Cost/ Unit xx- - Marketing Expenses