Marketing Numerical Quiz 1 ADMS 2200

ADMS 2200: Intro Marketing!

January 29th, 2013

Review for Numerical Quiz 1
Formulas:
1. Percentage Change:
•Change = (New Value - Old Value) / (Old Value)
•Example: Sales grew from $30 billion to $31 billion.
•($31 - $30) / $30 = 3.3% Change
2. New Value:
•New Value = (Old Value) X (1+Percentage Change / 100)
•Example: Sales in 2012 were $320,000. Expecting sales to grow 18%
•($320,000) X (1.18) = $377, 600
3. Old Value:
•Old Value = (New Value) / (1+Percentage Change / 100)
•Example: 2013 market size forecasted to be $30 million representing 11% growth compared o 2012. To calculate 2012 market size...
•($30 million) / 1.11 = $27.03 million
4. New Profit Margin:
•New Profit Margin = (Old Profit Margin) X (1+Growth/100)
•Example: AlPizza last year profit margin was 20%. Gross profit margin grew 5%
•(20%) X (1.05) = 21%
•If statement says grew 5 percentage points = 20% + 5% = 25%
5. Market Share:
•Market Share = (Own Sales) / (Total Market Sales)
•Example: 2006 global sales of supercars was $3 billion. Lamborghini’s sales were $400 million, calculate Lamborghini’s market share.
•($0.4 billion) / ($3 billion) = 13.3%
•Is the exact same formula if question asks for a unit figure.
6. Relative Market Share:
•RMS = (Own Market Share) / (Leading Competitor’s Market Share)
•Example: Lamborghini’s market share in the supercar market was 13.3% in 2006,
Ferrari’s market share was 63% What is the relative market share for Ferrari compared to
Lamborghini.
•(63%) / (13.3%) = 4.74 If RMS is above 1 means market leader, below 1; firm is lagging
7. Market Size:
•Market Size = (Firm’s Sales) / (Market Share in % / 100)
•Example: AlPizza in 2012 held 1.18% of market share while PizzaDon’s share was
2.3%. Al knows his sales in 2012 were $320,000, he needs to calculate Don’s $ sales.
First he needs to calculate 2012 market size.
•(320,000) / (0.0118) = $27.1 million
•Now he can calculate Don’s dollar sales based on Don’s market share
8.