Administrative

Why is it Important to Conduct a Marketing Breakeven Analysis?

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Conducting a regular marketing breakeven analysis is something that is important for both big businessmen and small entrepreneurs to do. This form of business accounting will show you how much you have to earn to offset all your operating costs; past this point, you will start making a profit. The benefits of conducting a break-even analysis is that it allows you to see the relationship between your production costs and your expenses as well as letting you play around with these figures to determine how changes in costs, prices and revenues will affect break-even points and profit levels. However, the limitation of break-even analysis is that it is best suited to analyzing a single product, as it is easier to determine all the relevant factors required.

The various elements of a marketing breakeven analysis computation are:

•    Fixed costs. Also known as overhead, these are normal expenses that do not change much from month to month. Examples include utilities, rent and insurance premiums.

•    Sales revenues. These represent the amount of income you earn from sales. To ensure the accuracy of your analysis you need realistic sales forecasts based on the actual volume of business you expect rather than estimates of how much you have to sell in order to make a profit.

•    Gross profit per product. This is the amount that remains after you have subtracted the production costs from the sale price. For example, if you have a product that is selling for $500 but it costs you $350 to produce, then your average profit per product is $150.

•    Gross profit percentage. This figure tells you how much of the sale price represents profit. To illustrate, using the above example, the average gross profit percentage of your product is 30 percent.

Using these figures, we can conduct a sample marketing breakeven analysis to determine what your break-even point is. Assuming that your fixed costs are $10,000 a month, divide it by your gross profit percentage or 0.3; this means that you must earn $33,333 a month just to break even. If your expected earnings are less than this, it means that you either have to lower costs or increase sales if you want your business to flourish.

For example, after conducting your marketing breakeven analysis you might decide that you need to find a supplier who will sell to you at cheaper prices, have to increase your prices or find some other way to reduce your costs.

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How to Choose the Best Liquid Vitamin Supplements Multi Level Marketing Business Opportunity

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A liquid vitamin supplements multi level marketing business is a great opportunity to make extra money in your spare time, and perhaps eventually, may even become a full-time career for you. Liquid vitamin supplements offer nutrients that you may not be getting in your regular diet in a form that many people find easier to take since the taste can be masked by combining it with other liquids. It is also easier to get children to take their daily dose of vitamins if they are in liquid form. Since there is a strong demand for liquid vitamins, it is not that hard to find customers to buy your products so you won’t have too hard a time launching your business and recruiting distributors.

How do you find the best liquid vitamin supplements multi level marketing opportunity? The first step is to investigate the opportunity very carefully. Note that a reputable MLM should not pay you commissions based on recruiting alone but more on the actual sale of products. If an MLM requires you to recruit more distributors in order to make more money or asks you to buy more inventory than you think you can sell, then you should be careful since it may be an illegitimate pyramid scheme.

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The next step in finding a good liquid vitamin supplements multi level marketing business is to look at their compensation plan. There are several types of compensation, including uni-level, binary and matrix plans. The most common MLM compensation is the uni-level plan, in which the distributor gets a commission from every distributor they have recruited in addition to their sales. As your individual and group sales increase, you gradually ascend to a higher level where you can earn higher commissions. This means that the distributor is encouraged to enroll more distributors so that they can increase their commissions and ascend to higher levels.

On the other hand, a binary plan requires distributors to recruit only two other distributors. The new recruits in turn must recruit two distributors of their own, and so on. This means that once you have fulfilled your recruitment requirement you will then focus your efforts on selling. A matrix plan also sets limits on the number of recruits you need to make but also allows you to earn commissions from the sales of recruits your distributors have enrolled, until the ‘matrix’ is filled. Consider which compensation plan your liquid vitamin supplements multi level marketing business opportunity offers to see if it is beneficial to you and reflects the way you feel most comfortable working.

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Why is it Important to Understand the Retail Marketing Merchandising Definition?

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What is the retail marketing merchandising definition and why is it important for every professional retailer to be familiar with it? Understanding the concepts of retail marketing and retail merchandising is vital to ensure the success of any retail business since it involves not only choosing the right types of products to sell but also how to promote them to your customers.

Retail merchandising involves the whole process of conducting retail sales, starting from choosing which products will appear on your store’s shelves, deciding how best to market these to consumers as well as pricing decisions. Retail marketing, on the other hand, focuses only on how best to reach the target customers in order to interest them in buying your products and can involve processes such as product promotion.

Once you have a clear idea of what is the retail marketing merchandising definition, you can start applying your understanding of these concepts to create specific plans to achieve your retail goals. For example, you can draw up a merchandising plan by first doing a study of what products are available on the market that may be appropriate to be sold in your store and then establishing relationships with the suppliers of these products to get the most favorable price based on the volume of goods you will buy. Once you have arranged a regular supply of products to sell, you will have to determine the unit price you will sell them for that will ensure that your store makes a profit. There are a number of ways of setting unit prices, including adding a certain percentage above the unit acquisition price to looking at the demand for the product vs. the supply in the immediate area and setting the price accordingly.

Once you have determined the unit selling price and have the products on your shelves, it is time to promote them to your customers. This can involve moves such as initially offering the product at a lower price as an incentive for people to try it out, setting up attractive displays in the stores to make people aware of the new product and its benefits and favorable placement within the store. An example is if the product may be placed near the checkout counters so that people would impulsively add it to their purchases as they are checking out. All of these plans are an important part of the concrete application of the retail marketing merchandising definition in a real-world retail setting.

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Situation Analysis for Marketing Plans – 4 Important Factors That Determine Success

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Situation Analysis is a major pillar in making an effective marketing plan outline. The marketing business makes use of situation analysis to look at the internal and external factors affecting the business situation.

Situation Analysis for Marketing Plans is unique in such a way that it carefully looks at the 5 C’s or crucial aspects of marketing:

Company – these are internal factors such as philosophies, business goals, product time line, advertising strategies, offers, administration and staff

Collaborators or partners – these * suppliers, distributors and alliances that help the company operate on a daily basis

Customers – this is the target market that fuels the company’s goals

Competitors – knowledge of how competitors operate is essential in boosting the company’s marketing strategies such as advertising and product positioning

Climate or environment – these include cultural, societal and economic factors, government policies and current trends to name a few

The 4 important factors that determine success can be summarized in this example S.W.O.T. analysis marketing plan that takes into consideration the 5 C’s previously discussed:

1.    Strengths
•    What are the strengths of the company?
•    Can the company be proud of its staff?
•    Has the company been awarded for a certain service or product?
•    What are the strong points of the company according to the consumers and the sales or service statistics?
•    How strong is the company’s presence in the market?
•    Does the company affect the current trends in its field of concentration?

2.    Weaknesses
•    What is the company lacking in terms of achieving the business goals?
•    Are there personnel factors that affect the overall performance of the company?
•    Are there conflicts of interests between collaborators?

3.    Opportunities
•    How can the company’s performance be improved to be at par if not better than that of the top competitor’s?
•    What are the suggestions from consumers?
•    What are the current trends in advertising and marketing?
•    How can the rapidly advancing technology be used to boost sales and visibility?
•    How can the company expand its collaborations and partnerships?
•    Does the company make sure that it stays within reasonable competitive advantage in terms of offers to collaborators, workers and consumers?

4.    Threats
•    Does the competitor make use of more up-to-date marketing strategies?
•    Does the company’s product or service cater to the ever-changing needs and wants of consumers?
•    Does the company ensure that all staff members are on the same page in terms of what the company stands for?
•    Are there government policies, existing or pending that could affect how the company operates?

Given above is just a sample of a situation analysis plan for marketing. Use of the SWOT analysis and consideration for the 5 C’s are effective tools in maintaining a system of check and balance in companies. Situation analysis has long been employed to ensure that everyone in the company stays on track on the road to achieving the company’s business goals.

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