Financial Aspect Of The Marketing Plan

Break even is when your income is equal to your expenditure (total costs: fixed + variable)

I. Executive Summary II. Situation Analysis o Market Summary  Target Market Demographics  Geographic  Demographics  Behavior Factors Market Needs Market Trends Market Growth o SWOT Analysis  Strengths  Weaknesses  Opportunities  Threats o Competition o Product Offering o Keys to Success o Critical Issues III. Marketing Strategy o Mission o Marketing Objectives o Financial Objectives o Target Markets o Positioning o Strategies o Marketing Mix o Marketing Research o Action Plan IV. Financials o o o V. Controls o o o VI. Summary Implementation Marketing Organization Contingency Planning Breakeven Analysis Sales Forecast Expense Forecast

A profit and loss account is intended to show a business its income and expenditures and calculate the company’s net profit or loss based upon the difference between those figures. It is extremely useful in determining past performance and to try and predict future results. It enables a business to see what changes could make to improve on its profit. It also give enough information to help a business to set targets.

The break even values for a profit model are the values for which you earn $0 in profit. Use the equation you created in question one to solve P = 0, and find your break even values.

* Accounting Profit – What a firm makes when total revenue is greater than total cost

It helps managers a lot in evaluating future courses of action regarding pricing and the introduction of new services. CVP analysis or Breakeven is used to compute the volume level at which total revenues are equal to the total costs. When total costs and total revenues are equal, the organization is said to be “breaking even”. Managers can utilize P&L statements which are used to project profit or net income. P&L statements can be developed to serve decision making purposes. These can be created for any subunit within an organization, whereas income statements are created only for the overall accounting entity. Break even analysis contains important assumptions and is very essential to the managers to determine whether assumed values can be realistically achieved. Managers can perform CVP analysis to plan future levels of operating activity and provide information about:

reach 47,476 units which will result in $166,166 in dollars during the third quarter of our first

Although, break-even is very helpful for a company to see where they are and how much improvement they can make, the company can never say that it is 100% correct as change in costs or selling price can affect this analysis greatly. Also, in the short-run break-even analysis can show an accurate figure where as in a long run, it will be a lot more difficult. So, break-even analysis is not that accurate.

The main problem is the implementation of marketing plans with limited budget. The purpose of this analysis: 1) to evaluate the strength and weaknesses of each marketing option 2).Recommend what option should be adopted, rejected, or modified and adopted.

The break-even point is the volume that equates total revenue with total cost and profit is zero. Student Response True Score: 2/2 Value 100% Correct Answer True

Some management prefers to view the break even points via a percentage, in which case we would need to derive the contribution margin as a ratio. This would be the unit contribution margin/ unit sales price.

The accounting breakeven point tells how many units the company must sell in year 1 to bring their operating income to zero. This takes into consideration the fixed costs (rent included) plus depreciation. In the case of the Lazy Mower, 7263 units would need to be sold to break even.

The break-even point can be expressed in two ways. It can be expressed in terms of units, and it can be expressed in terms of sales amount. The formula for the break-even point expressed in units is as follows:

(1) A break even analysis is a result of variable costs deducted from the organizations revenue. The result is the contribution margin. Then the fixed costs are deducted to equal a number. The break even point would be when the costs are the same as the break even amount.

Marketing plays the most important role for the success of a business. In this chapter, the business’ marketing objectives are laid out together with the plans or actions that will be needed to achieve these objectives. Furthermore, this chapter includes the profile of the respondents which aided the researchers to create this part of the feasibility study.