Break-even analysis, Marketing Management

Break-Even Analysis 

Break-even pricing (target profit pricing) is  tactic to setting up price to break- even on the cost of producing and marketing products or to make the target (desired) profit It utilize a break-even chart that indicate the overall cost and overall revenue at different levels of sales volume.

a.   Although break-even analysis and target profit pricing may help the company to find out minimum prices that needed to cover expected profits and costs, they don't take the price-demand relationship into account.

b. while using this method, the company ought to also consider the influence of price on the sales volume required to realize target profits and the probability that the needed volume will be gained at each likely price.

Distribution channels have been recognize as being a group of independent organizations involved in the procedure of making a service or product available for consumption or use by the business user or consumer. Making decisions including distribution channels are among the most complicated and challenging decisions which facing the firm. Each of the channel system (and there may be several) make a different level of costs and sales. Unlike flexible elements of the marketing mix (price decisions for instance), once a distribution channel has been selected, usually the firm must stick with their choice for some time. Additionally, the selected channel strongly influences, and is affected from the other elements in the marketing mix.

A strategic planner restricts their options if they consider just one channel choice. Each of the firm needs to recognize alternative ways to attain its market. There are various means available. Some choices include the range of direct selling to multiple intermediate levels (which can involve many distribution relationships). Each of these choices has advantages and disadvantages connected with them. Horizontal and vertical systems are more sophisticated than the main channel alternatives and each is described in context with contemporary usage. E-commerce and the usage of the Internet have also impacted channel choice and plan in a profound way.

Channel design starts with assessing customer channel-service requirements and company channel constraints and objectives. The company then recognize the major channel alternatives in terms of the kinds of intermediaries, a number of intermediaries, and the channel responsibilities of each. No system, no matter how good it has been strategic, is without conflict. If quality service and low cost is to be distributed, management of distribution conflict is essential. Because distribution relationships tend to be long-term in nature, the choice of channel partners is very significant and should be taken very seriously.

In today's global marketplace, selling a manufacture is sometimes simpler than obtaining it to customers. Therefore, marketing logistics and supply chain management is getting improved attention from strategic planners. The job of marketing logistics systems is to minimize the overall cost of providing a preferred level of customer services although carrying those services to the customer through the maximum amount of speed. Major logistics functions of warehousing; transportation, inventory management, and logistics information management are described and explored.

Posted Date: 11/8/2012 1:34:37 AM | Location : United States

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