You work for Alberta Greenwood, owner of Better Bike and Ski Shop. Yesterday, Alberta met with the Schwinn sales representative, Tom Beeker, who urged her to sign a contract with Floorgraphics. That company leases floor space from retail stores and creates and sells floor ads to manufacturers such as Schwinn. Floorgraphics will pay Alberta a fee for leasing the floor space, as well as a percentage for every ad it sells. Alberta was definitely interested and turned to you after Beeker left.
"Tom says that advertising decals on the floor in front of the product reach consumers right where they're standing when making a decision," explained Alberta. "He says the ads increase sales from 25 to 75 percent."
You both look down at the dusty floor, and Alberta laughs. "It seems funny that manufacturers will pay hard cash to put their names where customers are going to track dirt all over them! But if Tom's telling the truth, we could profit three ways: from the leasing fee, the increased sales of products being advertised, and the share irfacTfevenues. That's not so funny."
Your task: Alberta Greenwood asks you to write a letter for her signature to CEO Richard Rebh at Floorgraphics, Inc. (5 Vaughn Dr., Princeton, NJ 08540) asking for financial details and practical information about the ads. For example, how will you clean your floors? Who installs and removes the ads? Can you terminate the lease if you don't like the ads?9