Marketing Definitions

Name Product name.

Price Unit price.

Promo Budget Amount spent to advertise and promote the product. Promotion Budgets drive awareness.

Sales Budget Amount spent on distribution systems and sales force. Sales Budgets drive accessibility.

Computer Prediction Only useful as a benchmark, this forecast is produced to allow you to see the impact Price, Promo Budgets and Sales Budgets have on demand. It assumes you are competing against a set of mediocre products, and does not have any information about actual competitors.

Last Year's Sales Total number of products sold in the previous year.

Your Sales Forecast Overrides the Unit Sales Forecast. If no value is entered, the spreadsheet will use he Unit Sales Forecast for all calculations. If a value is entered, the computer will use that number. You should always enter a prediction for unit sales that you have developed on your own. The computer’s forecast is only useful as a benchmark.

Gross Revenue Forecast Unit Sales Forecast times Price. The calculation assumes that enough units will be built to meet demand.

Cost of Goods The sum of material and labor costs. The Marketing spreadsheet may not be aware of 2nd Shift labor costs, since those are determined on the Production spreadsheet. It assumes that the current labor cost per unit figure on the Production spreadsheet is correct.

Contribution Margin Forecast Gross Revenue Forecast less cost of goods.

Less Promo & Sales Contribution Margin less associated promotion and sales budgets.