Marketing Metrics Assignment
Autor: YINAN CHEN • October 16, 2016 • Case Study • 473 Words (2 Pages) • 940 Views
Marketing Metrics Assignment
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Data for these questions is on the following page and is also available as an Excel spreadsheet. You may do your calculation in Excel rather than writing them out. If you use Excel to perform your calculations, submit your Excel spreadsheet with the answers clearly marked.
GFE is a manufacturer of widgets. They sell their widgets directly to multiple retailers who sell them to end-users (people like you and me).
- What is the total Marketing and Sales Expense for GFE?
- What is the current Net Marketing Contribution (NMC) for GFE?
- What is the current Gross Profit Margin for GFE?
- What is the current Marketing Return on Sales (ROS) for GFE?
- What is the current Marketing Return on Investment (ROI) for GFE?
- What is the Retail Margin?
- What is the Retail markup percentage?
Assume GFE is considering spending $30,000 more on advertising and that they believe they will be able to sell 40,000 more widgets to the retailers as a result of this increased spending on advertising. The MSRP will remain at $10 and GFE will continue to offer the retailers (the trade) a 10% off the list price as a promotion.
- What will be the new Gross Sales Revenue?
- What will be the new Trade Promotion total?
- What will be the new Cost of Goods Sold?
- What will be the new Marketing and Sales Expense?
- What will be the new Gross Profit?
- What will be the new Gross Profit Margin?
- What will be the new Net Marketing Contribution (NMC)?
- What will be the new Marketing ROS?
- What will be the new Marketing ROI?
- Should they go forward with the plan to increase advertising expenditures? Why or why not?
A second independent proposal (do not consider the information in the paragraph above for this question) is for GFE to provide an additional 3% off promotion to the retailers (making the trade promotion 13% instead of 10%). GFE believes they will receive better shelf space allocations from the retailers as a result of this increase in the trade promotion.
- What percent increase in GFE’s manufacturer’s gross sales revenue would GFE need in order to have the same Net Profit before taxes ($720,000) as they have now?
Use the following data to answer the questions about Manufacturing Firm GFE.
Retailers’ Sales Revenue from GFE’s widgets | $3,000,000 |
Manufacturer (GFE’s) Gross Sales Revenue | $1,800,000 |
Trade Promotion (10% off) | $180,000 |
GFE’s Net Sales Revenue | $1,260,000 |
GFE’s Cost of Goods Sold (all Variable) | $540,000 |
GFE’s Advertising Expenditure | $50,000 |
GFE’s Sales & Marketing Administration Expenditure | $150,000 |
GFE’s Consumer Promotion Expenditure | $70,000 |
GFE’s Corporate Executive Salary | $70,000 |
GFE’s Research & Development costs | $20,000 |
GFE’s Net Profit before taxes | $720,000 |
Total Widget Industry Sales at retail | $30,000,000 |
Manufacturer’s (GFE’s) Suggested Retail Price/unit | $10.00 |
GFE’s List Price to Retailer | $6.00 |
Number of Widgets Sold by GFE to retailers | 300,000 |
GFE’s ($) Market share | 10% |
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