Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • July 2010 (Revised December 2011)
  • Background Note
  • HBS Case Collection

Marketing Analysis Toolkit: Pricing and Profitability Analysis

By: Thomas J. Steenburgh and Jill Avery
  • Format:Print
  • | Pages:8
ShareBar

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, 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 that 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 that help visualize the results.

Keywords

Forecasting and Prediction; Price; Profit; Management Analysis, Tools, and Techniques; Marketing Strategy; Demand and Consumers; Measurement and Metrics; Strategic Planning; Mathematical Methods; Retail Industry

Citation

Steenburgh, Thomas J., and Jill Avery. "Marketing Analysis Toolkit: Pricing and Profitability Analysis." Harvard Business School Background Note 511-028, July 2010. (Revised December 2011.)
  • Educators
  • Purchase

About The Author

Jill J. Avery

Marketing
→More Publications

More from the Authors

    • March–April 2023
    • Harvard Business Review

    Case Study: Should a Dollar Store Raise Prices to Keep Up with Inflation?

    By: Jill Avery and Marco Bertini
    • June 2022 (Revised August 2022)
    • Faculty Research

    Dollar Tree: Breaking the Buck

    By: Jill Avery and Marco Bertini
    • April 2022
    • Faculty Research

    Christie's and Leonardo da Vinci's Salvator Mundi: The Value of a Brand

    By: Jill Avery
More from the Authors
  • Case Study: Should a Dollar Store Raise Prices to Keep Up with Inflation? By: Jill Avery and Marco Bertini
  • Dollar Tree: Breaking the Buck By: Jill Avery and Marco Bertini
  • Christie's and Leonardo da Vinci's Salvator Mundi: The Value of a Brand By: Jill Avery
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College