Marketing Performance Tools and Application Exercises
9.1 Channel Mapping and Pocket Price— This marketing performance tool is used with Figures9-3 and 9-4 in
answering questions A (below) and B (next page).
A. How does the overall average pocket price change if the business modifies its sales mix to 30 percent
direct sales, 40 percent agent-distributor, and 30 percent distributor-retailer?
Teaching Note: As shown, the average pocket price decreases from $4,540 to $3,993 with thischange
in channel strategy. The lower pocket price is mostly due to fewer sales at a higher selling priceby the
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B. How does the average pocket price change if the business replaces the direct sales channel with an
agent-distributor channel, with a sales mix of 60 percent agent-distributor and 40 percent
distributor-retailer?
Teaching Note:The average pocket price is driven even lower with no direct sales channel,
9.2 Marketing Channel Profitability: This marketing performance tool is used with Figure 9-5in answering
questions A (below)and B ( next page).
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A. How do the net marketing contribution and marketing ROI change if the business modifies its sales mix
to 30 percent direct sales, 40 percent agent-distributor, and 30 percent distributor-retailer?
Teaching Note: As shown, the total net marketing contribution would drop from $1.019 million to
$930,000, while overall marketing ROI would increase from 276 to 293 percent. The goal is to make
B. How do the net marketing contribution and marketing ROI change if the business replaces the direct
sales channel with the agent-distributor channel, with a sales mix of 60 percent agent-distributor and 40
percent distributor-retailer?
Teaching Note:As shown, the total net marketing contribution would drop from $1.019 million to
9.3 Alternative Channel Profitability: This marketing performance tool is used with Figure 9-24 in answering
questions A and B.
A. Using the “Analysis-Profit” column, how much is needed in marketing and sales expenses to maintain a
20 percent market share and the same level of net marketing contribution in the alternative channel?
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B. Using the “Analysis-Share” column, how much market share is needed to produce the same net
marketing contribution if the marketing and sales budget were 20 percent of sales in the alternative
channel?
Teaching Note:
A. As shown in the Hold-Prot column, holding market share at 20 percent and
maintainingthe net marketing contribution of $18.96 million would require a marketing
B. As shown in the Hold-Share column, maintaining current marketing prots and holding
marketing and sales expenses at 20 percent of sales would require a market share of
Market-Based Management Copyright © 2012
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Instructor’s Manual– Chapter 4 Publishing as Prentice Hall