Marketing

Marketing Guideline: Chapters 1 & and 2 from your textbook (pg. 29 and pg. 55, the descriptions are also on the webpage). You will go to the CAPS webpage where the publisher provides pre-programmed spreadsheets. The instructions to get to the site are below the question list. The spreadsheets are already filled out with the needed data and formulas so they are ready for you to review and edit. You can also reset to the original settings at any time. Instructions to get to the CAP page: Go to: http://www.mhhe.com/irwin/fourps/web/index.html Click on the entry for our book (19th edition). On the left hand side you will see a box for "Online Learning Center" that says student edition or instructor edition. Click student edition and then on the left hand side you will have a list of course materials including CAPS. Chapter 1 - "Revenue, Cost, and Profit Relationships" 1) Look at the Spreadsheet Screen. 1a) How much revenue does Sue expect from calendars? 1b) How much revenue from notebooks? 1c) How much profit will the store earn from calendars? 1d) From notebooks? 2) If Sue increases the price of her calendars to $6.00 and still sells the same quantity (Note: Change the price from $5.00 to $6.00 on the spreadsheet and the program will recompute revenue and profit). 2a) What is the expected revenue? What is the expected profit? 2b) On your sheet of paper (word document, answer sheet, etc.), show the calculations that confirm that the program has given you the correct values. 3) Sue is interested in getting an overview of how a change in the price of notebooks would affect revenue and profit, assuming that she sells all 6,000 notebooks she is thinking of ordering. Prepare a table - on your sheet of paper/answer sheet - with column headings for three variables: selling price, revenue, and profit. Show the value for revenue and profit for different possible selling prices for a notebook - starting at a minimum price of $1.60 and adding 8 cents to the price until you reach a maximum of $2.40. AT what price will selling 6,000 notebooks contribute $5,400 to profit? At what price would notebook sales contribute only $1,080.00? (Hint: Use the What If analysis feature to compute the new values. Start by selecting “selling price” for notebooks at the value to change, with a minimum value of $1.60 and a maximum value of $2.40. Select the revenue and profit for notebooks as the values to display). Chapter 2 - "Target Marketing" 4) Take a look at this new spreadsheet 4a) On a piece of paper (your answer sheet), show the calculations that prove that the spreadsheet “total profit” value for the target marketing strategy is correct. (Hint: Remember to multiple unit production cost and unit distribution cost by the quantity sold, that is, Profit = Q(Revenue per unit - Cost per unit)). 4b) Which approach seems better - target marketing or mass marketing? Why? 5) If the target marketer could find a way to reduce distribution per unit by $0.25, how much would profit increase? 6) 6a) If Marko, Inc., decided to use the target marketing strategy and better marketing mix decisions increased its share of purchases from 50 to 60 percent - without increasing costs - what would happen to total profit? 6b) What does the analysis suggest about the importance of marketing managers knowing enough about their target markets to be effective target marketers? 7) Reducing costs is one way to increase profit. Propose one way they could reduce costs. Propose one way they could increase their revenue. Explain your reasoning.