Question: 3 . Marketing research indicates that the average consumer visits a supermarket 2 . 5 times per week. On each visit the average market basket
Marketing research indicates that the average consumer visits a supermarket times per week. On each visit the average market basket is $ on which the store earns a margin. Customers are very loyal but there is a churn rate of per year. When discounting cash flows, managers assume the interest rate is per year.
a What is the weekly margin obtained from a typical customer? $
b How long can the store assume that the average customer will stay shopping at its store?
years
c What is the total discounted margin obtained over the lifetime of a typical customer?
$
d What is the minimum number of new customers required to justify a new ad campaign costing $
customers
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
