8.4 Price-Volume Pricing (Figures 8-22 to 8-24)

Starting Data Scale
Millions
Analysis Analysis
Price Elasticity  
-2.0
-2.0
Percent Change Price  
10.0
%
-10.0
%
Percent Change Volume  
-20.0
30.0
Area of Performance Current
Situation
Strategy 1
Increase Price
Strategy 2
Decrease Price
Market Demand
200
200
200
Market Share
5.0
%
4.0
6.5
Average Net Price (*)
$1000
$
1100
900
Volume
10
8
13
Sales
10000
8800
11700
Percent Margin
15.0
%
22.7
5.6
Gross Profit
1500
2000
650
Marketing & Sales Exp (% of sales)
10.0
%
10.0
10.0
Marketing & Sales Exp ($)
1000
880
1170
Net Marketing Contribution
500
1120
-520
Marketing ROS
5.0
12.7
-4.4
Marketing ROI
50
127
-44
Breakeven Volume
6666667
3520000
23400000
Breakeven Market Share
3.3
1.8
11.7
Share Premium
1.7
2.2
-5.2

(*) Not Scaled

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