Calculation Questions, Answered
Cannibalization Rate = Sales Lost from Existing Products (# or $) / Sales of New Product (# or $) The cannibalization rate is a way for businesses to determine how much they might lose in sales when introducing a new product. It calculates the sales that could be removed from their existing products and given …
Compound Annual Growth Rate = ((Ending Value ($ or #) / Starting Value ($ or #)) ^ (1 / Number of Years)) – 1 Compound Annual Growth Rate (CAGR) is a fancy term used in business and marketing to determine how much something has grown or increased over several years. It helps us understand the …
Projection of Sales = Penetration t (#) * Average Frequency of Purchase (#) * Average Units per Purchase (#) This equation helps businesses and marketers figure out how much they are expected to sell in the future. It considers three important factors: penetration, the percentage of people who will buy their product; average frequency of …
Trial Rate = First-time Triers in Period t (#) / Total Population (#) The trial rate is a way to determine how many people are trying something for the first time compared to the total number of people. We want to know how many people tried a new product in a month. We divide the …