QUESTION 3 Last week, the CEO of Saw Tell Airbnb received an email from Belle, the...
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QUESTION 3 Last week, the CEO of Saw Tell Airbnb received an email from Belle, the newly appointed Marketing Manager. Details of Belle's email as follows: From : Belle To : CEO of Saw Tell Airbnb Sent 1 April 2023 Subject: Top Urgent - Proposal for New Service Line to Increase Revenue & Profits Dear CEO, I have been thinking about implementing a new service line "Office on the Go". Currently, our organization only offers Airbnb services with only accommodation and paid breakfast. The current trend now is to include office services, especially administrative services. If the proposed office service line is added to our Airbnb, I believe it will be a huge success. Many current competitors have already implemented office on the go concept into their Airbnb organizations as many businesses throughout the world now allow their staff to work from home. It is therefore no longer a surprise that many people are travelling and working at the same time. I will also like to propose a high end concierge service and a caf to complement "Office on the Go". These services are important as they will be value added services and prospective customers will find this service a truly different experience, equivalent to travelling on a first class or business class seats on flights. However, issues on pricing these new services is the problem now. Due to my lack of sufficient knowledge in this area, I am unable to proceed further in my final proposal to you. I have queries on the factors that will affect pricing and whether we should use marginal cost plus approach or full cost plus approach? Recently, a friend of mine who has been a Consultant for more than twenty years proposed the use of ABC. I will like to know the advantages and disadvantages of using ABC as compared to the marginal or full cost plus approach and will like to seek your urgent assistance to request Sally, the Finance Manager to prepare the relevant information for me. Please treat my request as top urgent as I am sure my proposal will definitely bring in additional profits and revenue for the company. Thank you for your assistance. Regards, Belle QUESTION 3 Last week, the CEO of Saw Tell Airbnb received an email from Belle, the newly appointed Marketing Manager. Details of Belle's email as follows: From : Belle To : CEO of Saw Tell Airbnb Sent 1 April 2023 Subject: Top Urgent - Proposal for New Service Line to Increase Revenue & Profits Dear CEO, I have been thinking about implementing a new service line "Office on the Go". Currently, our organization only offers Airbnb services with only accommodation and paid breakfast. The current trend now is to include office services, especially administrative services. If the proposed office service line is added to our Airbnb, I believe it will be a huge success. Many current competitors have already implemented office on the go concept into their Airbnb organizations as many businesses throughout the world now allow their staff to work from home. It is therefore no longer a surprise that many people are travelling and working at the same time. I will also like to propose a high end concierge service and a caf to complement "Office on the Go". These services are important as they will be value added services and prospective customers will find this service a truly different experience, equivalent to travelling on a first class or business class seats on flights. However, issues on pricing these new services is the problem now. Due to my lack of sufficient knowledge in this area, I am unable to proceed further in my final proposal to you. I have queries on the factors that will affect pricing and whether we should use marginal cost plus approach or full cost plus approach? Recently, a friend of mine who has been a Consultant for more than twenty years proposed the use of ABC. I will like to know the advantages and disadvantages of using ABC as compared to the marginal or full cost plus approach and will like to seek your urgent assistance to request Sally, the Finance Manager to prepare the relevant information for me. Please treat my request as top urgent as I am sure my proposal will definitely bring in additional profits and revenue for the company. Thank you for your assistance. Regards, Belle
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