(18C) Marketing Consultant booklet

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extracts from one of the Working with your Business Consultant Professional Calculator series booklets.

Setting a Sales Price …

One method of setting a unit sales price is to determine the unit cost
of production then multiply by the desired rate of return. For this
method to be accurate, you must identify all costs associated with the
product.

formula
PRICE=COST÷UNITS×(1+%RTN÷100)

where
PRICE = price per unit
COST = total costs
UNITS = number of units produced
%RTN = desired percent rate of return


Forecasting Sales of Accessories …

Many products have optional accessories or peripheral products. For
example, cars have lots of extras and computers have software and
optional equipment.
The sales forecasts of these optional items can be based on a percent-
age of the sales of the main product. The following equation helps
determine sales forecasts of these optional products.

formula
#OPT=#MAI×(%MAI÷100)

where
#OPT = units of the optional product
#MAI = units of the main product
%MAI = percent of main product


Revising Your Forecast to Reflect Current Market Conditions …

Most sales forecasts are based on certain assumptions about, and
incomplete knowledge of, your market and competition. After the
forecasts are made, internal and external changes make your original
assumptions and your forecast incomplete. Examples of these changes
in the market that were not reflected in the original forecast are a
price drop (yours or your competitiors), advertising or promotional
campaign, rebate offer, introduction of a new product by a competitor,
or a change in distribution of your product. The formulas below helps
you revise your forecast, based on the perceived impact of the market
changes.

formula
NEWF=BASE+((A%+B%+C%)÷100)×BASE

where
BASE = original forecast
%A = expected change in sales for change in market A
%B = expected change in sales for change in market B
%C = expected change in sales for change in market C


Planning Advertising Expenditures …

The advertising-sales ratio helps marketers and advertisers determine
how much money to spend for advertising, based on projected sales.
To use the formula below, you need to know the forecast unit sales,
revenues per unit, and the percent of sales to be spent on advertising.

formula
AD$=#UNI×$REV×(AD%÷100)

where
AD$ = advertising cost
#UNI = forecast number of units sold
$REV = revenue per unit in dollars
AD% = advertising as percent of sales in dollars


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