E-Portfolio Assignment
By: Sean Bindra
100170563
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Descriptive Statistics
Marketing and Finance
Market Share Metrics
Margins
Breakeven Analysis
Profit Dynamics
Customer Lifetime Value
Distribution
Sales Force Management
Linear Demand
Promotion Profitability
Advertising Metrics
Web Metrics
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Quantitatively describing main features of a
collection of data.
Examples include: mean, median, and mode.
Mean: arithmetic mean/average of a set of
data.
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Ex.) data set: 2,1,2,1,4
 Mean = 2+1+2+1+4/5 = 2
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Median: numerical value that separates higher
half of sample from lower half.
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Ex.) data set: 2,4,6,8,10
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Median = 6
Mode: value that occurs most often.
 Ex.) data set: 2,2,3,1,5,2
 Mode = 2
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Provides insight into the overall financial
condition of a firm and analyzes potential
investments.
Net Profit = sales – costs
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Ex.) If Tom made revenue of $5,000 and his costs
totaled $2,000, what is his net profit?
 Net Profit = $5,000 - $2,000 = $3,000
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Return on Investment = net profit/investment
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Ex.) If Tom’s net profit is $5,000 and he invests
$2,500 into his business, what is his ROI?
 ROI = $5,000/$2,500 = 2.0 %
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Return on Sales = net profit/sales revenue
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Ex.) What is Tom’s ROS?
 ROS = $3,000/$5,000 = 0.60 %
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Earnings Before Interest and Taxes = net
profit + interest payment + taxes
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Ex.) Tom paid interest of $400 and taxes of $100.
What is Tom’s EBIT?
 EBIT = $3,000 + $400 + $100 = $3,500
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Measures the sales of a brand or product relative
to the overall size of a market.
Unit market share = unit sales/ total market unit
sales.
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Ex.) If there are 100 widgets sold in the country and
company A sells 50 of them, then the unit market share is:
50/100 = 0.2%
Revenue market share = sales revenue/total
market sales revenue.
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Ex.) If company A makes $100, while companies B, C, D,
& E make a combined $900 in revenue, then company A’s
revenue market share is: 100/1000 = 0.10%
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Brand Penetration = # of people who bought
specific brand/defined population.
Category Penetration = # of people who
bought any brand/defined population.
Share of Penetration = brand penetration
/category penetration.
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Ex.) 500 households buy Nike shoes while 2,000
households buy at least one style of product from
the Nike category. Therefore, the share of
penetration for Nike shoes is: 500/2,000 = 0.25%
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Manufacturer Distributor Wholesaler
Retailer Customer.
Selling Price = cost to produce + margin
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Ex.) If selling price is $50 and the cost is $20, then the
margin is: $30  $50-$20 = $30
Other key formulas:
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%margin = $margin/selling price
Selling Price = cost/(1- %margin)
Cost = selling price(1 - %margin)
Markup% = selling price – cost/margin
Selling Price = cost(1 + markup%)
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Determines the point at which revenue received =
the costs associated with receiving that revenue.
Total Costs = total fixed costs + total variable
costs.
Total Contribution = total revenue – total variable
costs.
Profit = total contribution – total fixed costs.
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Breakeven Formulas:
Unit Breakeven = fixed cost/unit contribution.
 Revenue Breakeven = fixed cost/contribution
margin %.
 Revenue Breakeven = breakeven units*unit price.
 Breakeven Units = $breakeven/unit price.
 Target Profit Breakeven = (fixed costs + target
profit)/contribution margin %.
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Financial benefit realized when the amount of
revenue gained exceeds the expenses, costs and
taxes.
Target Volume in Units = (fixed cost + profit
objective)/selling price – variable cost.
Target Volume in Dollars: computed by taking
the solution from above formula and dividing it by
the selling price.
Target Revenue = unit target volume*selling price
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Ex.)
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A product sells for $20, costs $5 to make, and
company has fixed costs of $30,000. How many
products must be sold to reach target profit of
$30,000?
 Target Volume = ($30,000 + $30,000)/($20 – $5) = 4000
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A product sells for $40, costs $10 to make, and
company has fixed costs of $30,000. How many
dollars worth of the product must be sold to reach
target profit of $60,000?
 Target Revenue = ($30,000 + $60,000)/($40 – $10)/$40 =
3000
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Discounted sum of all future customer revenue
streams (-) product, servicing, and remarketing
costs.
Assume:
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$M: contribution
$R: retention spending per period per active
customer
r: retention rate
d: discount rate
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CLV = [$M –$R] x [(1 + d) / (1 + d -r)]
Ex.)
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An Internet service provider charges $20.00 per
month. Variable costs are $1.00 per month. The
attrition rate is 0.5% per month with marketing
spending of $5 per year. With a monthly discount
rate of 1%, what is the CLV for a customer we plan
on acquiring?
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$M = $20.00 -$1.00 = $19, $R = $5/12 = $0.42, r = 0.995, d = 0.01
 CLV = [$19 –$0.42] x [(1+.01)/(1+.01-0.995)]
 CLV = $1,251
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Purpose: - To understand sales dynamics in retail
channel. Helps in making right decisions where
expansion and growth strategies are concerned.
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Numeric Distribution = (# stores that stock a
brand)/(total stores in relevant market)
All Commodity Volume = (total sales of stores
carrying brand) / (total sales all stores)
Product Category Volume = (tortilla sales of stores
carrying Madre’s) / (tortilla sales all stores)
Outlet
All Sales
All Shoe
Sales
Baley SKUs
stocked
Finley SKUs
stocked
Store 1
$100,000
$1,000
5ct, 23ct
10ct, 21ct
Store 2
$70,000
$400
12ct
24ct
Store 3
$40,000
$500
5ct, 23ct
n/a
Store 4
$20,000
$200
n/a
10ct, 21ct
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Numeric Distribution of Baley is:
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All Commodity Volume of Baley is:
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(3) / (4) = 75%
($100k + $70k + $40k) / ($100k + $70k + $40k + $20k)
= 91.3%
Product Category Volume of Baley is:
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($1000 + $400 + $500) / ($1000 + $400 + $500 + $200)
= 90.5%
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Workload = Current Accounts (#) * Average time
to service account + Prospects (#) * Time trying to
convert prospect to sale.
Ex.) The sales territory of Magma has 20
current accounts requiring 10 days of support
per year and 40 prospects. It is estimated to
take 15 hours in the sales process for phone
and on-site follow-up. The yearly workload is:
(20 * 10 ) + (40 * 15 / 8) = 150 + 75 = 275 days
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Sales Potential = Number of Possible Accounts *
Buying Power ($)
Ex.) A company has determined that there are 200
doctors in 6 cities that could be a source of
business. Of those, 100 are cardiologists, with an
avg. potential account value of $45K, and 100
rheumatologists with an avg. potential account
value of $30K. The sales potential is:
= (100 * $45,000) + (100 * $30,000)
= $7,500,000
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Sales Goal formulas:
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Historical = Share of prior year sales (%) * Overall
objective ($)
Sales Potential = Share of sales potential (%) *
Overall objective ($)
Historical + Inc = Prior year + Share of sales
potential (%) * Overall increase objective ($)
Weighted = Historical * Weight + Sales Potential * (1
– Weight)
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Relationship between quantity and price is
linear.
Quantity = (Slope * Price) + MWB
Maximum Willing to Buy = (Quantity – Slope)
* Price
Maximum Reservation Price = MWB / (Slope
Profit Maximizing Price = ½ (Unit Cost +
MRP)
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Ex.) We observe that at a price of $6, a quantity
of 8 is sold and that at $5, 10 units of a product
are sold. Compute the slope, quantity, MWB,
MRP, and PMP.
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Slope = (8 - 10) / (6 - 5) = - 2
(Quantity) 10 = (slope) -2 *(price) 5 + MWB, so MWB
= 10 + 10 = 20
MRP: 0 = 20 – 5*price = $4 (solving for price at which
we sell 0 units)
PMP = ½ (8 + 4) = $12 (assuming unit cost = $8)
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Lift (%): measures incremental sales generated
as percentage of baseline sales.
Cost of Incremental Sales = Marketing spend
($)/ incremental sales ($,#)
Return on Marketing Investment =
(incremental sales*contribution marginmarketing spending)/marketing spending
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Coupon Redemption Rate = coupons
redeemed/coupons distributed
Cost per Redemption = coupon face amount +
redemption charges
Percentage Sales on Deal = Sales with
temporary discount/total sales
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Impressions = Exposures = Opportunities to
See
Rating Points: impressions as a % of
population.
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Ex.) If a TV ad is shown 2 times and that show is
watched by 7,000 people out of a population of
100,000, that advertisement would generate 35 rating
points (5 x 7,000 / 100,000).
Gross Rating Points = impressions/total
population
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Cost per Impression: monitored to measure
the cost efficiency of campaigns.
Calculated as follow: cost of
advertising/impressions generated
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Ex.) If there are 10,000 impressions which are
generated from $500 of costs, then cost per
impression is: $500/10,000 = $50.
Share of Voice = company impressions/total
impressions in market
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Hits: number of file requests received by the
server is counted.
Page-views: amount of times a page is
requested by the server.
Visitors: amount of different users to a site.
Click-through Rate = click through(#)
/impressions
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determines how effective internet advertising is.
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Cost per Click = total cost/# of clicks
generated
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Cost per Order = total cost/# of orders placed
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refers to amount paid for each click that is generated.
refers to the cost that is paid for each order
Cost per Customer Acquired = total cost/# of
customers acquired
Bounce Rate = visits that access only a single
page/total Visits to the Website
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specifies how effective a company is at producing
relevant traffic