Marketing Mathematics
“A Basic Skill Needed in Life and in
Any Business”
Marketing Mathematics
What Kind of
Mathematics
Do We Use
in
Business???
Marketing Mathematics
 Addition
 Subtraction
 Multiplication
 Division
 Fractions
 Percentages
Marketing Mathematics
 Addition
 Subtraction
 Multiplication
 Division
 Fractions
 Percentages
 It’s
Not Calculus!!
Marketing Mathematics
 Addition
 Subtraction
 Multiplication
 Division
 Fractions
 Percentages
Marketing Mathematics
How Do We
Use
Mathematics
in
Business???
Marketing Mathematics
Identify situations in
which the ability to add
& subtract are required:
Discussion
Marketing Mathematics
Identify situations in
which the ability to add
& subtract are required:
Cashier’s daily balance
 Daily sales summary
 Customer accounts
 Sales checks
 Counting $$$
 Inventory

Marketing Mathematics
Identify situations in
which the ability to
multiply & divide are
required:
Discussion
Marketing Mathematics
Identify situations in
which the ability to
multiply & divide are
required:
Bulk pricing
 Average sales
 Extensions
 Ad time purchases
 Payment plans

Marketing Mathematics
Identify situations in
which the ability to
calculate percents &
fractions are required:
Discussion
Marketing Mathematics
Identify situations in
which the ability to
calculate percents &
fractions are required:
Time cards
 Discounts
 Markup
 Sales tax calculations

Marketing Mathematics
Be Able to
Complete a
Standard
“Sales Check”
to 100%
Accuracy
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Use of the sales receipt
 Customer receipt
 To determine commissions
 Planning future purchases
 Market research
 Billing information
 Calculating of taxes
 Delivery information
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Types of sales transactions
 Cash/Check
 Charge
 Layaway
 Discount
 Cash on Delivery “COD”
 Returns/Exchanges
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Types of sales transactions
 Cash/Check
 Charge
 Layaway
 Discounted
 Cash on Delivery “COD”
 Returns/Exchanges WHY???
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Rules to completing a sales
check
 Fill in all necessary
information
 Be legible & accurate
 Use in correct order
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Making Change
 The “Count-Back Method”
• Announce the $$$ amount
of the sale
• Place bill on register plate
• Repeat the amount
tendered
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Making Change (Continued)
 The “Count-Back Method”
• Count the amount out of
the register to yourself
• . . . then to the customer
• Place money in the
register properly
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy
Making Change (Continued)
 The “Count-Back Method”
• Place the receipt in the
customer’s hand
• Thank the customer
 Use the fewest bills & coins
possible!!!

Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Making Change (Continued)
 Avoiding mistakes
• Remain calm/focused
• Be willing to start over
• Do one transaction at a time
• Never put bill in register
until finished
• Enter information carefully
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

The Cash Drawer:
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

The Cash Drawer:
 Bills are placed flat and
facing the same direction
 Fifties and above are placed
under the register drawer
 Maintain an adequate change
fund
 Ask for change in advance
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Be able to complete a charge
sales transaction
 Very similar to a regular
sales check
 Add customer account
number and authorization
code
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to complete a charge
sales transaction (Continued)
 First check the expiration date
 Authorize account
 Compare signature on receipt
w/ signature on card’s back
 Is everything legible?
 Return the card to customer
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Be able to complete a check
transaction
 More difficult
 Just like cash, but fraudulent
checks are more plentiful
“I can’t be overdrawn, I’ve
still got checks in my
checkbook.”
Marketing Mathematics

Be able to Complete a
Standard Sales Check to 100%
accuracy

Be able to complete a check
transaction (Continued)
 Your job is to prevent
 Checks are called “sales
drafts.” Drafts are orders to
pay. In this case, you’re
ordering your bank to pay.
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to complete a check
transaction (Continued)
 Checks are “negotiable
instruments” meaning that they
are transferable.
 To transfer a check, it must be
endorsed
 There are special endorsements
• “For Deposit Only”
• “Pay to the Order”
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to complete a check
transaction (Continued)
 Do not accept “Two-Party”
checks
 Check for the correct
information on the check
 Compare signature on check
w/ what is on their picture ID.
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to complete a check
transaction (Continued)
 Remember, if they can check
your merchandise, you can
check their checks.
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction
 Why do stores hate to do
return transactions?
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction
 Why do stores hate to do
return transactions?
Because money is
leaving the store
instead of coming in!!!
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 Do store have to do returns?

Why do stores do returns?
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 Do store have to do returns?
No

Why do stores do returns?
Trust & loyalty
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 What other options are
available to a salesperson?
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 What other options are
available to a salesperson?
• Exchange
• Credit to their account
• Gift certificate
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 Types of exchanges:
• Even Exchange
• Uneven Exchange
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 Return Polices:
• Wrapping?
• Length of time?
• Damage?
• Receipt?
• Sale item?
See examples next
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 Return Polices:
• Dress shirt is unwrapped?
• Kept for one month?
• Bottom of shoes scuffed?
• It was a gift, no receipt?
• 50% off sale, but . . . ?
Role Play
Marketing Mathematics

Be able to Complete a Standard
Sales Check to 100% accuracy

Be able to conduct a customer
return transaction (Continued)
 What business forms must be
changed:
• Inventory
• Cash register balance
• Commissions
• Income statements
Marketing Mathematics
Marketing Mathematics

Be able to operate a
computerized cash register

Cash register purposes:
• Calculate accurately
• Provide customer receipt
• Provide records for store
• Display work to customer
• Speed purchase
• Cash security
• Inventory records
• Merchandise ordering
Marketing Mathematics

Be able to operate a
computerized cash register

Common cash register keys:
• Operator’s key
– Locks
– Initiate reads
“X” read
“Z” read
– Indicates function
Marketing Mathematics

Be able to operate a
computerized cash register

Common cash register keys:
• Keyboard:
– Receipt
– Receipt feed
– Journal feed
– Date/No.
– Numeric keys
– Dept. keys
Marketing Mathematics

Be able to operate a
computerized cash register

Common cash register keys:
• Keyboard:
– #/NS
– TX/M
– “X”
– Item Corr.
– “C”
– “Retn MDSE”
– “R/A”
Continued
Marketing Mathematics

Be able to operate a
computerized cash register

Common cash register keys:
Continued
• Keyboard:
– #/NS
No Sale
– TX/M
Tax Mod.
– “X”
Extension
– Item Corr.
Corrections
– “C”
Clear
– “Retn MDSE” Returns
– “R/A”
Account Returns
Marketing Mathematics

Be able to operate a
computerized cash register

Types of Cash Registers:
• Keyboard:
– “PO”
– “Vali Date”
– “Chg.”
– “ST”
– “Doll Disc”
– “AT/TL”
Continued
Marketing Mathematics

Be able to operate a
computerized cash register

Types of Cash Registers:
• Keyboard:
– “PO”
– “Vali Date”
– “Chg.”
– “ST”
– “Doll Disc”
– “AT/TL”
Continued
Paid Out
Validate
Charge sale
Subtotal
Discount
Amt Tendered
Marketing Mathematics

Be able to operate a computerized cash
register

Common cash register types:
• Manual Key Entry
– Numeric keys
– Function keys
• Optical Scanning
– Uses wand to “read”
– UPC (Universal Product Codes)
Marketing Mathematics

Be able to operate a
computerized cash register

Be able to verify a “Change Fund”:
• A change fund is the amount of
$$$ an operator starts the day
with
• Amounts vary between $100
and $150 depending on
customer habits & sales volume
• The make-up depends on the
prices charged by the store
Marketing Mathematics

Be able to operate a
computerized cash register

Be able to verify a “Change Fund”:
• Verify your change fund at the
start of each day
• “Buy Change” during the day
in advance of running out.
– Pennies = 50 = $ .50
– Nickels = 40 = $ 2.00
– Dimes = 50 = $ 5.00
– Quarters= 40 = $10.00
– Dollars = 25 = $25.00
Continued
Marketing Mathematics

Be able to operate a
computerized cash register

Be able to “Tally” the day’s sales &
“balance” the register at day’s end
• End the day by totaling the
coin, currency, charge slips, &
checks in the register
• Subtract the change fund
• Make allowances for returns,
corrections, & paid out
transactions
Marketing Mathematics

Be able to operate a
computerized cash register

Be able to “Tally” the day’s sales &
“balance” the register at day’s end
• Compare the “tape” of the day’s
transactions with your totals
• Record “overage”
or “underages”
• Turn in “Tally”
• Make change fund for tomorrow
Continued
Marketing Mathematics
Be
able to
describe the role
of banks in our
business’s
operations
Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
 Homework:
1. Read Chapter 12,
Pages 194 – 205
2. Read Chapters 29 & 30,
Pages 512 – 539
Marketing Mathematics

Be able to describe the role of banks
in our business’s operations

Role of banks:
 Security
 Money Management.
Marketing Mathematics

Be able to describe the role of banks
in our business’s operations

Money substitutes:
 Bank checks
 Traveler’s checks
 Drafts (bank to bank checks)
 Money orders
 Cashier’s checks
 Debit cards
 Credit cards (Store cards vs. Bank cards)
 Loans
Marketing Mathematics

Be able to describe the role of banks
in our business’s operations

Other services:
 Deposit boxes
 Counseling
• Business
• Personal
• Real estate/Stocks
& Bonds

Community service
Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Savings
 Checking
 Terms:
 Interest
 Payee
 Drawer
 Drawee

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Savings
 Checking
 Terms:
 Interest
 Payee
 Drawer
 Drawee

Income
To Whom
Writer of the check
The bank
Marketing Mathematics

Be able to describe the
role of banks in our
business’s operations

Specialty terms:
 Signature Authorization
Card
 Taxpayer ID
Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Why do people save money?

(& others don’t)
• ________________
• ________________
• ________________
• ________________
Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Why do people save money?
• For major purchases
• Emergencies
• Retirement
• ???

Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Earning Interest on Savings
• Why do we get interest
income from a bank?

– Because they let others use your
money to make them and themselves
make money.
Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Earning Interest on Savings
• Start early
• Save at least 10% of gross
income

Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Saving Concepts
• Rate of Return – the percentage

of increase in the value of your
savings.
• Simple vs. Compounding –
“Interest earning income on
interest income.”
Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Types of Savings Accounts
• Regular Savings Accounts
• Certificates of Deposit (CDs)
– Maturity Dates
• Money Market Funds
– Also called Mutual Funds

Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Pros of Saving Accounts
• Insurance through the FDIC

– Federal Deposit Insurance Corporation
– Up to ??? K
• Liquidity
Marketing Mathematics

Be able to describe the role of
banks in our business’s operations
Accounts:
 Savings
 Saving Account Basics:
 Cons of Saving Accounts
• Low Rates of Return

– Very little risk
• Inflation Risk
– 2% return; 4% inflation? Ouch!!!
• Fees
– Min. balance, Account Fees, Taxes
Marketing Mathematics

Be able to describe the role of
banks in our business’ operations


Accounts:

Checking
Homework:
1.
Read Chap 29, pages 512 – 518
Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 A check is a written order directing a
bank to pay money on demand to the
person/company named
 Once the bank pays the money, the
check is “canceled” meaning the
debt has been paid.

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 A check can be “endorsed” meaning
sign over to another party.
 Society is moving more in the
direction of “debit cards” allowing
funds to be removed from another
person’s account immediately.

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 Types of Accounts:
• Regular Checking – for
customers who write only a few
checks a month & do not keep
high balances. Allows for
“ATMS” and “Direct Deposit.”

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 Types of Accounts:
• Interest Bearing – Allows the
customer to earn interest income
from the funds left in the
checking account

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 Types of Accounts:
• Joint Account – Allows two or
more people to write checks on
the account.

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 Account Security
• Signature Card

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 Account Services
• Overdraft Protection is for when
the client is “overdrawn.”
• “Stop Payment”
• “Online Banking”
• “Debit Cards”

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Keeping Track of Financial
Transactions:
 Writing a Check
• Parts of a Check
– See diagram next page
• Check Register – a log of
customer transactions

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Checking Account Basics:
 Parts of a Check

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Making Deposits
 Deposit Slips
 Keep Your Receipts
 Use the ATM
 Watch for Endorsements
• For Deposit Only

Marketing Mathematics

Be able to describe the role of banks
in our business’s operations
Accounts:
 Checking
 Reconciling Your Bank Statement
 Confirming that your records agree
with the bank’s records.
 Balancing Your Checkbook
 Outstanding Checks & Deposits
 Fees (Bank and ATM)
 Interest

Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Homework:
1.
2.
3.
Read Chap 28, pages 496 - 507
Complete the Crossword Puzzle Provided
On the Puzzle sheet, answer any one
“Critical Thinking” question from the text.
Use complete sentences. Summarize the
question in the first sentence.
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions
 Personal Financial Planning means
spending, saving, & investing your
money so you can enjoy the kind of
lifestyle you want.
 Financial Goals are Critical – buy a
car, save for college, socialize, pay
your bills, A plan to retire, etc.
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Steps to Financial Planning:
1. Determine your financial
situation
–
–
–
–
List your savings
Monthly income
Monthly expenses
Debts
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Steps to Financial Planning:
2. Determine your financial goals
–
–
–
–
Spend or save?
Wants & needs?
Work now or later?
Education?
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Steps to Financial Planning:
3. Identify possible courses
of action
–
“There’s more than one way to skin
a cat.”
4. Evaluate your alternatives
–
–
Gather needed information
Consider pros, cons, & risk
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Steps to Financial Planning:
5. Implement your financial
action plan
–
–
Identify your objectives
Determine needed tactics
6. Review & revise your plan
–
–
Needs & situations change
Update your plan as needed
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Sources of Financial Information:
• Internet research of company
information (Annual Reports).
• Publications:
– Business Week
– Wall Street Journal
– The New York Times
– Financial Times
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Understanding Risk:
• Every financial decision has a certain
amount or risk. You must be able to
accept possible losses.
• Types of Risk:
–
–
Inflation: a general increase in the cost of
goods & services
Interest Rate: Interest rates rise & fall which
will effect your cost & return.
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Understanding Risk:
• Every financial decision has a certain
amount or risk. You must be able to
accept possible losses.
• Types of Risk (Cont.)
–
Income Risk: Your income may rise & fall
over time. You could lose a job. Your or a
family member’s health may fail for a time,
or you could get a raise!
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Understanding Risk:
• Every financial decision has a certain
amount or risk. You must be able to
accept possible losses.
• Types of Risk (Cont.)
–
Personal Risk: Don’t put yourself in a risky
situation unnecessarily for minimal benefit.
For example, driving for 24 hours straight to
save plane fare
Marketing Mathematics

Be Able to Manage Your
Personal Finances

Making Financial Decisions

Understanding Risk:
• Every financial decision has a certain
amount or risk. You must be able to
accept possible losses.
• Types of Risk (Cont.)
–
Liquidity Risk: The ability to withdraw
savings or investments in a timely manner
without lose of value.
Marketing Mathematics

Be Able to Manage Your
Personal Finances

The Importance of Budgeting

Money Management is a method of planning
to get the most from one’s money (“Getting the
biggest bang for the buck”):
• A budget is a plan for using your income
in a way that best meets your wants &
needs.
–
A good budget will help you
set priorities for spending &
saving and keep track of
your money?
Marketing Mathematics

Be Able to Manage Your
Personal Finances

The Importance of Budgeting

Preparing a Budget
1. Set your financial goals
-
What do I want to accomplish monthly,
yearly, for the next five years?
What’s important to me?
Are my goals practical?
2. Estimate your income
-
Actual money you earn
Gross pay, net pay,& deductions
Marketing Mathematics

Be Able to Manage Your Personal Finances

The Importance of Budgeting

Preparing a Budget
3. Budget for unexpected expenses & savings
-
Unexpected expenses: medical, damages
Save for major purchases &
future needs (college?)
4. Budget for fixed expenses
-
-
Fixed expenses (necessary)
such as rent, insurance,
car loans, food, etc.
Often stay the same over time
Allow for depreciation expense
Marketing Mathematics

Be Able to Manage Your Personal Finances

The Importance of Budgeting

Preparing a Budget
5. Budget for variable expenses
-
Variable expenses change and can be controlled
more readily. They include dining out, phone
charges, entertainment, gifts, etc. Often called
discretionary.
6. Record what you spend
-
-
Determine the difference
between actual expenses
vs. budgeted expenses
Surpluses & deficits
Marketing Mathematics

Be Able to Manage Your Personal Finances

The Importance of Budgeting

Preparing a Budget
7. Review Spending & Saving Patterns
-
Budgeting is a continual process. Review each
month & consider changes.