Marketing Math Equations

Question 1

Revenue Equation

Answer 1

Revenue=Price * Quantity

Question 2

Profit Equation

Answer 2

Profit= Revenue-Expenses

Question 3

profit maximization

Answer 3

price so that total revenue is as large as possible relative to total costs
*does not necessarily mean high prices

Question 4

satisfactory profits

Answer 4

a reasonable level of profits
-often connected to CSR (corporate social responsibility)

Question 5

target return on investment

Answer 5

the most common profit-orientated objective that prices to achieve a particular ROI

Question 6

market share

Answer 6

-many believe market share indicates effectiveness- not always the case
-extreme competition may result in limited share growth

Question 7

sales maximization

Answer 7

-ignore profits, competition, and the marketing environment, as long as sales are rising
-short-term focus

Question 8

Break-even Price Equation

Answer 8

Fixed Cost/(Variable Price Per Unit- Variable Cost Per Unit)