Marketing Analysis Toolkit: Pricing and Profitability Analysis

Posted: 19 Aug 2010

See all articles by Thomas J. Steenburgh

Thomas J. Steenburgh

University of Virginia - Darden Graduate School of Business

Jill Avery

Harvard Business School

Date Written: July 16, 2010

Abstract

Pricing is one of the most difficult decisions marketers make and the one with the most direct and immediate impact on the firm's financial position. This toolkit will introduce the fundamental terminology and calculations associated with pricing and profitability analysis. Users will learn how to produce and interpret demand curves and calculate the price elasticity of demand. The concepts of revenue, costs, and contribution margin, gross margin, and net income will be introduced to inform profitability analyses. Finally, retailer profitability metrics including retailer margin and penny profit are discussed. The note gives students a foundation for analyzing marketing cases, as well as providing an analytical structure and process for completing a marketing plan. The note is accompanied by a free Excel worksheet which contains sample problems, prebuilt Excel models to calculate demand curves, price elasticity, and profitability metrics for firms and their channel partners, and charts and graphs which help visualize the results.

Suggested Citation

Steenburgh, Thomas J. and Avery, Jill J., Marketing Analysis Toolkit: Pricing and Profitability Analysis (July 16, 2010). HBS Case No. 511-028; Harvard Business School Marketing Unit. Available at SSRN: https://ssrn.com/abstract=1661886

Thomas J. Steenburgh (Contact Author)

University of Virginia - Darden Graduate School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Jill J. Avery

Harvard Business School ( email )

Cambridge, MA
United States
6174958084 (Phone)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
1,262
PlumX