The marketing manager of a hotel chain is considering putting an advertisement in a magazine. How would
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Question:
The marketing manager of a hotel chain is considering putting an advertisement in a magazine. How would they analyze it?
Facts:
Average Room Rate = $149/night
Room Cost = $23.00
Fortune Small Business Magazine
Circ = 1,000,000
Circ cost: $65/M: $65 x 1,0000 = $65,000
Production cost for ad = $25,000
Questions to answer:
1. What is the breakeven*?
A) room sales (units)
B) response rate
2. What is Cost per Response?
3. What would the profit or loss be?
4. Would you recommend this to your boss (B2B Resp Rate .79%)?
*Breakeven: The number of units that need to be sold to cover the marketing costs.
(Please use Excel if possible)
Related Book For
Basic Business Statistics Concepts and Applications
ISBN: 978-0132168380
12th edition
Authors: Mark L. Berenson, David M. Levine, Timothy C. Krehbiel
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