Case study:
You are the marketing manager for RV Earphones, a (fictitious) progressive manufacturer
and seller of bass-heavy Earphones for the Indian market. RV Earphones faces its greatest
competitor in X Earphones, who manufactures and sells bass-heavy Earphones to the same
market. You plan to assess and monitor strategic metrics for both RV and X to understand
RV's competitive advantages and understand the strengths and weaknesses of X.
Marketing Metrics:
Marketing Metrics are measurable values used by marketing teams to demonstrate the
effectiveness of campaigns across all marketing channels. Whether you are looking to track
digital marketing performance, SEO progress, or your social media growth, having
measurable marketing metrics and KPIs set up can help your business reach targets month-
over-month.
QUESTIONS:
1. Calculate the brand equity index values for RV Earphones and X Earphones. Use the
following formula: Brand Equity Index = Effective Market Share * Relative Price *
Durability
2. Calculate the contribution margin percentage for RV Earphones and X Earphones.
The contribution margin can be stated on a gross or per-unit basis. It
represents the incremental money generated for each product/unit sold after deducting the
variable portion of the firm's costs.
The contribution margin is computed as the selling price per unit, minus the
variable cost per unit. Also known as dollar contribution per unit, the measure indicates how
a particular product contributes to the overall profit of the company. It provides one way to
show the profit potential of a particular product offered by a company and shows the portion
of sales that helps to cover the company's fixed costs. Any remaining revenue left after
covering fixed costs is the profit generated.
Contribution Margin Ratio
RV Earphones X Earphones
40% 31%
Link: https://www.investopedia.com/terms/c/contributionmargin.asp
3. Calculate the customer profit for RV Earphones and X Earphones
Customer profit (CP) is the profit the firm makes from serving a customer or
customer group over a specified period of time. Calculating customer profitability is an
important first step in understanding which customer relationships are better than others.
Often, the firm will find that some customer relationships are unprofitable. The firm may be
better off (i.e., more profitable) without these customers. At the other end, the firm will
identify its most profitable customers and be in a position to take steps to ensure the
continuation of these most profitable relationships.
Customer Profit
RV Earphones X Earphones
120000 40000
Link: https://marketing-dictionary.org/c/customer-profit/
4. Calculate the revenue year on year growth (YOY) between Year 1 and Year 2 for RV
Earphones and X Earphones.
Revenue growth is the increase (or decrease) in a company’s sales from one
period to the next. Shown as a percentage, revenue growth illustrates the increases and
decreases over time identifying trends in the business.
Revenue Growth 1st and 2nd Year
RV Earphones X Earphones
9% 11%
5. Calculate the revenue year on year growth (YOY) between Year 2 and Year 3 for RV
Earphones and X Earphones.
Revenue Growth 3rd and 4th Year
RV Earphones X Earphones
8% 10%
Link:https://www.business-literacy.com/financial-concepts/revenue-growth/#:~:text=Revenue
%20growth%20is%20the%20increase,identifying%20trends%20in%20the%20business.
