How to calculate Price from target margin
The Price from target margin formula, with plain worked examples you can check yourself.
Price from target margin = C ÷ (1 − m)
Worked examples
C = 40 · m = 60%Price from target margin = 100
C = 60 · m = 40%Price from target margin = 100
C = 60 · m = 60%Price from target margin = 150
How to use it
- Write down the values for each letter in the formula.
- Do the brackets first, then divide or multiply.
- Check the units before you compare results.
- Compare the answer with last period or with a competitor to see if it is good or bad.
This formula belongs to Positioning & Pricing.
Related terms
Value propositionMarket segmentationPenetration pricingPrice skimmingCompetitive pricingUnique selling proposition
Practice Price from target margin with real numbers
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