UPenn Marketing 101 Quiz 1

Unit Contribution Formula
Revenue per Unit – Variable Costs per Unit
Contribution Margin Formula
Unit Contribution/Revenue per Unit (in %)
Break-Even Volume Formula
Fixed Costs/Unit Contribution
Market Share Formula
Firm Sales/Total Market Sales
Profit Formula
(Unit Contribution*Units Sold) – Fixed Costs
Customer Lifetime Value Formula
Annual Contribution per Customer*Years as Customer
Annual Contribution Formula
Unit Contribution*Units per Customer per Year
Five Cs of Marketing (Strategic)
Company, Customers, Collaborators, Competitors, Context
Strengths, Weaknesses, Opportunities, Threats
Four Ps of Marketing Mix (Tactical)
Product, Promotion, Price, Place
A discrepancy between actual and ideal state
Four Basic Needs
Esteem, Control, Belonging, Meaningfulness
Multi-Attribute Model
Attitude Towards Brand = Sum(Belief Strength*Importance of Attributes)
Scale: Belief Strength
-3 to 3
Scale: Importance of Attributes
1 to 7
Rules of thumb; Price, habit, normative, more is better
Satisfaction Formula
f(Perceived Performance – Expectation)
A +/- discrepancy between expectations and a product’s performance
Cost per Mille (CPM)
(Cost/No. of Viewers)*1000
Breaking down an audience into various groups to better target each, improve satisfaction, etc.
Types of Segmentation
Geographic, Demographic, Psychological, Psychographic (Lifestyle), Sociocultural, Behavioral, Hybrid
Criteria for Good Segments
Homogeneous within, heterogeneous between, substantial, operational
Directing a marketing campaign at a specific segment(s)
To (target segment and need), our (brand) is the (concept) that (point to difference)
Goal of STP
Target a group, extract max value from customers, retain customers, improve CLV
Variable Costs
Change with volume of production (e.g. – manufacturing, shipping, sales commissions)
Fixed Costs
Stay the same regardless of level of production (e.g. – executive salaries, rent, insurance, overhead)
Contribution Margin
Relative measure of assessing unit contribution compared to selling price (expressed as a percentage)
Break Even Volume
The number of units you need to sell to cover total fixed costs
Sales/Revenue/Volume Market Share
The percentage of (sales or units) accounted for by that firm within the product category
Customer Market Share
The percentage of customers the firm has relative to the total customers
Profit Impact
Impact of a product on company profits
Customer Lifetime Value
The value of the entire stream of purchases that the customer would make over a lifetime of patronage
Annual Contribution
Average amount that a typical customer would spend with the business, with expenses subtracted
Sunk Costs
Money spent on items that is considered unrecoverable (e.g. – market research, R&D, past expenses)
Return on Investment
Measures the profits generated by investments in marketing activities
Return on Investment Formula
Net return from an investment/Costs of investment

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