Measuring Marketing

Chapter 3 Value-to-Volume Ratio

Measurement Need

Determine how efficient the marketing efforts are compared to the competition.

Solutioni

The value-to-volume ratio (VVR) measures the firm’s estimated share of total market gross profits (either for the company overall or a specific product) compared to the firm’s share of the total dollar volume sold in the market or the product category:

$VVR=\frac{\%P_{gm}}{\%V_m}$

Where

VVR = value-to-volume ratio

%Pgm = estimated percentage share of total market gross profits

%Vm = percentage share of market total dollar volume

Airbus and Boeing are the two dominant commercial aircraft manufacturers. In 2017 their respective revenues and gross profits were as follows:

Airbusii	Boeingiii
Revenues