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Expense and Margin Functions in Drug Stores1

Expense and Margin Functions in Drug Stores1 EXPENSE AND MARGIN FUNCTIONS IN DRUG STORES! FRANK M. BASS The University of Texas A N attempt is made here to derive quan­ ups obtained in each of the major markup 1"\. titative estimates of the relationships divisions weighted by the sales of each of sales, location, store type, and city size division. Thus, variation in the product to expense and gross margin for retail mix is largely responsible for variation of drug stores. The basic data were taken percentage gross margins among drug from 1948 profit-and-loss statements from stores. Available data generally include 303 drug stores, mostly service independ­ only prescription sales as a proportion of ents in most areas of the United States total store sales. and in cities of all sizes. Store selection When the percentage of the stores' sales which are in prescriptions is correlated was by no means random, but it is con­ sidered that consequent bias does not im­ with percentage gross margin for the 34 pair the basic findings. The profit-and­ stores for which this information is avail­ loss statements have been audited and able in 1948, the following equation re­ accounting procedure rendered uniform.s sults: 144P M, = 21.59 + ·4 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Marketing SAGE

Expense and Margin Functions in Drug Stores1

Bass, Frank M.
Journal of Marketing , Volume 20 (3): 6 – Jan 1, 1956
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Publisher
SAGE
Copyright
© 1956 American Marketing Association
ISSN
0022-2429
eISSN
1547-7185
DOI
10.1177/002224295602000302
Publisher site
See Article on Publisher Site

Abstract

EXPENSE AND MARGIN FUNCTIONS IN DRUG STORES! FRANK M. BASS The University of Texas A N attempt is made here to derive quan­ ups obtained in each of the major markup 1"\. titative estimates of the relationships divisions weighted by the sales of each of sales, location, store type, and city size division. Thus, variation in the product to expense and gross margin for retail mix is largely responsible for variation of drug stores. The basic data were taken percentage gross margins among drug from 1948 profit-and-loss statements from stores. Available data generally include 303 drug stores, mostly service independ­ only prescription sales as a proportion of ents in most areas of the United States total store sales. and in cities of all sizes. Store selection When the percentage of the stores' sales which are in prescriptions is correlated was by no means random, but it is con­ sidered that consequent bias does not im­ with percentage gross margin for the 34 pair the basic findings. The profit-and­ stores for which this information is avail­ loss statements have been audited and able in 1948, the following equation re­ accounting procedure rendered uniform.s sults: 144P M, = 21.59 + ·4

Journal

Journal of Marketing – SAGE

Published: Jan 1, 1956

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