9.2 Marketing Channel Profitability (Figure 9-5)

Analysis Scale
Area of Performance Direct Mixed Indirect Total
Channel Strategy
Direct Sales
Agent & Dealer
Wholesaler & Dealer
 
Target Customer
Large Accounts
Medium Accounts
Small Accounts
Served Market
Percentage of Sales
40
%
20
%
40
%
100
Revenue per Purchase (*)
$10000
$
$3000
$
$1000
$
5000
Retailer Discount
0
%
0
%
20
%
 
Wholesale Price (*)
10000
3000
800
 
Distributor Discount
0
%
15
%
15
%
 
Sales Agent Commission
0
%
5
%
0
%
 
Net Price (*)
10000
2400
680
4752
Company Sales Commission
0
%
0
%
0
%
 
Transaction Cost
5
%
2
%
1
%
 
Pocket Price (*)
9500
2352
673
4540
Unit Cost (*)
$6000
$
$1500
$
$500
$
2900
Percent Margin
36.8
36.2
25.7
32.3
Marketing & Sales Expenses (%)
15.0
%
8.0
%
5.0
%
9.6
Marketing & Sales Expenses ($)
1500
240
50
668
Net Marketing Contribution
2000
612
123
797
Marketing ROS
21.8
28.2
20.7
22.7
Marketing ROI
146
353
415
236

(*) Not Scaled

Starting Data Scale
Area of Performance Direct Mixed Indirect Total
Channel Strategy
Direct Sales
Agent & Dealer
Wholesaler & Dealer
 
Target Customer
Large Accounts
Medium Accounts
Small Accounts
Saved Market
Percentage of Sales
40
%
20
%
40
%
100
Revenue per Purchase (*)
$10000
$
$3000
$
$1000
$
5000
Retailer Discount
0
%
0
%
20
%
 
Wholesale Price (*)
10000
3000
800
 
Distributor Discount
0
%
15
%
15
%
 
Sales Agent Commission
0
%
5
%
0
%
 
Net Price (*)
10000
2400
680
4752
Company Sales Commission
0
%
0
%
0
%
 
Transaction Cost
5
%
2
%
1
%
 
Pocket Price (*)
9500
2352
673
4540
Unit Cost (*)
$6000
$
$1500
$
$500
$
2900
Percent Margin
36.8
36.2
25.7
32.3
Marketing & Sales Expenses (%)
15.0
%
8.0
%
5.0
%
9.6
Marketing & Sales Expenses ($)
1500
240
50
668
Net Marketing Contribution
2000
612
123
797
Marketing ROS
21.8
28.2
20.7
22.7
Marketing ROI
146
353
415
236

(*) Not Scaled

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