Unit 2 - Marketing 2 Flashcards
Draw the Boston Matrix.
Draw the lifecycle of a product.
Name two ways of protecting consumers interests.
- Boycotting - Not buying the produce.
- Lobbying - Getting government involved. Sending letters etc…
What are the advantages and disadvantages of expansion?
Advantages
- More customers.
- More revenue.
- More facilities.
Disadvantages
- Larger debts.
- Not enough demand.
- More competition.
What is gross profit?
The difference between the revenue from selling the product and the direct costs of making it:
Gross profit = Revenue - Costs of goods sold.
What is net profit?
The profit after everything - including fixed costs. The true profit.
Net profit = Sales revenue - Total costs.
What is the gross profit margin?
The fraction of every pound spent by customers that doesn’t go directly towards making a product:
Gross profit margin = Gross profit / Sales (turnover).
(x100 for percentage).
What is the net profit margin?
The fraction of every pound spent by customers that the company gets to keep after all its costs have been paid.
Net profit margin = Net profit/Sales revenue.
(x100 for percentage)
How do you calculate the current ratio?
Current ratio = Current assets / Current liabilities.
Ideally the figure should be around 1.5. If it is below 1, the firm owes more than it has. If it is above 2, the firm probably has too much money and should invest more in the business.
How do you calculate the acid test ratio?
Acid test ratio = Current assets - Stock / Current liabilities.
1 is ideal. Too high means more investment and too low means you may not be able to pay for things.
The acid test ratio is slightly more pessimistic and assumes that the company won’t be able to turn stock into cash.
