3c's Model

It is desirable to develop demographic and psychographic profiles of these likely consumers (the target audience).

Customer mix improvement should focus on targeting repeat customers and category between 40-60 that generates more revenue and profits

Example: The leverage ratio can be used to the companies benefit if they need to make a big purchase. They can add on more debt until the money comes through.

| If variable costs increase, but price and fixed costs are held constant, the break even point will decrease.

Today’s marketer must take into consideration many generational differences when considering a marketing strategy for a product. Most products are intended for a massive audience, requiring the marketer to utilize an integrated marketing scheme to encompass all generations.

Factors which affect fixed costs include the availability of outsourcing, which Apple has famously (some would say infamously) capitalized

In a desire to increase the company’s working capital for the company’s future financial investment in a plant modernization and expansion program, Beauregard Textile Company increased the price of its Triaxx-30 product to bring its profit margins up to that of their other products. In a sequential-move game theory Calhoun & Pritchard, Beauregard’s primary rival, did not raise its price even though its costs were assumed to be similar. As a result, Beauregard’s unit sales dropped significantly as their customers purchased the cheaper competitor’s product, causing Beauregard’s profit contribution to decrease. A closer examination of Beauregard’s cost analysis revealed that it includes fixed costs, which when

This process helps a firm or organisation in focusing its marketing effort towards a specific segment or a group of segments. Depending on the product, organisational goals, the size of the firm and the marketing resources available a firm may target only one ‘niche’ segment or alternatively focus on several related segments. Another method can be to start with one segment and add more when business grows successfully. Large companies often target all market segments and try to serve them by offering a large variety of products to suit all their needs, wants and demands.

Customers are assets, and their values grow and decline. Segmenting customers based on their lifetime value is a powerful way to target them because marketing mix activities can then aim at enhancing customer value. (Ho, 2006)

It is particularly interesting to note that the higher the fixed costs, the higher the break-even point. Thus, companies with large investments in equipment and/or high administrative-line ratios may require greater sales to break even.

Marketing has evolved through a change in production and consumption due to the advent of new technology (Ranchhod, 2004). The development of technology has also driven the globalisation of communication. During this period, consumers are facing a variety of choices (Jackson and Shaw, 2009). Thus, companies need to actively embrace these changing factors to grow their business and succeed in the marketplace.

Michael Porter, an authority on competitive strategy, mentions five forces that the stronger each of these forces is, the more companies are limited in their ability to raise prices and earn greater profit. In carefully scanning it industry, the corporation must assess the importance to its success of each of the five forces. Now, we will analyses these five forces in the inner-city paint corporation. The first one is threat of new entrants which means newcomers to an existing industry. The new entrants typically bring new capacity, if the company wanted to resist the threat of new entrants. They must build an entry barrier which is an obstruction that makes it difficult for a

Lucia Jenkins (2009), has identified the use of many financial ratios which are helpful in gaining more clear output of a particular company’s or firm’s financial matter. According to him he thinks that variable and fixed costs of the firms are very important. Variable costs are the costs which will increase or decreases in the proportions of the sales (e.g. – Electric bill, rent). Fixed costs are the costs which are fixed, whatever may be the sales the cost will be same (e.g. - rent, salaries,

The best way to improve sales and profits is to reach the selected target segments. That being said the marketing officers must make sure their advertisement reaches the customers who are most likely to purchase their products. Companies often develop customer profiles from feedback surveys or marketing research to gather these data records. Target customer variables or demographic factors can include age, gender, income level and education level.

➢ Fixed costs - with high fixed costs as a percentage of total cost, companies must sell more products to cover those costs, increasing market competition.