Chapter 3. Margins and Profits
Metrics covered in this chapter:
Selling Prices and Channel Margins
Average Price per Unit and Price per Statistical Unit
Variable Costs and Fixed Costs
Marketing Spending—Total,Fixed,and Variable
Break-Even Analysis and Contribution Analysis
Peter Drucker has written that the purpose of a business is to create a customer. As marketers, we agree. But we also recognize that a business can’t survive unless it makes a margin as well as a customer. At one level, margins are simply the difference between a product’s price and its cost. This calculation becomes more complicated,however,when multiple variations of a product are sold at multiple prices, through multiple channels, incurring ...