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Sales variance analysis: how state-of-the-art analytical tools can contribute to increased profitability

Author

Listed:
  • Evandro Pollono

    (Hinterhuber & Partners)

  • Rolands Pupkevičs

    (Hinterhuber & Partners)

Abstract

This article explains sales variance analysis, a business intelligence tool to compare different financial results, enabling practitioners to determine which component drives changes in sales and take educated actions. The unique angle of this article is that it bridges theory—by delving into all the details of sales variance—with practice—by highlighting the managerial interpretation of what causes such changes and providing insights as to how to act upon it. It also suggests using this tool for marketing and not simple budgeting purposes, in stark contrast with most theory encountered by the authors.

Suggested Citation

  • Evandro Pollono & Rolands Pupkevičs, 2023. "Sales variance analysis: how state-of-the-art analytical tools can contribute to increased profitability," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(1), pages 57-71, February.
    • Handle: RePEc:pal:jorapm:v:22:y:2023:i:1:d:10.1057_s41272-021-00369-0
    DOI: 10.1057/s41272-021-00369-0
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    References listed on IDEAS

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    1. Bergen, Mark & Ritson, Mark & Dutta, Shantanu & Levy, Daniel & Zbaracki, Mark, 2003. "Shattering the Myth of Costless Price Changes," European Management Journal, Elsevier, vol. 21(6), pages 663-669, December.
    2. Stephan M. Liozu, 2019. "Penetration of the pricing function among global Fortune 500 firms," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(6), pages 421-428, December.
    3. Tim J. Smith, 2021. "Normative decomposition of the profit bridge into the impact of changes in marketing variables," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(5), pages 530-545, October.
    4. Una McMahon-Beattie & Mairead McEntee & Robert McKenna & Ian Yeoman & Lynsey Hollywood, 2016. "Revenue management, pricing and the consumer," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 15(3), pages 299-305, July.
    5. Stephan M. Liozu, 2017. "State of value-based-pricing survey: Perceptions, challenges, and impact," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(1), pages 18-29, February.
    6. Joern Meissner & Arne Strauss, 2009. "Pricing Structure Optimization in mixed restricted/unrestricted Fare Environments," Working Papers MRG/0014, Department of Management Science, Lancaster University, revised Mar 2010.
    7. Marko Sarstedt & Erik Mooi, 2014. "A Concise Guide to Market Research," Springer Texts in Business and Economics, Springer, edition 2, number 978-3-642-53965-7, December.
    8. Stephan M. Liozu, 2021. "The adoption of pricing from an organizational perspective and its impact on relative firm performance," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(4), pages 390-402, August.
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