A large, dairy company is considering launching a new brand of yogurt. You are part of the
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Question:
- A large, dairy company is considering launching a new brand of yogurt. You are part of the team that is tasked with determining how the product should be marketed, including product features, package design, promotion, and advertising, etc.
After conducting a segmentation study, your team found that consumers interested in your brand fit into 4 broad categories: health nut (people who eat yogurt for its nutritional benefits), on-the-go (people who eat yogurt because eating it fits into their busy schedules), family (people who eat yogurt because it is an easy breakfast or snack for families or other groups), and simple (a segment with unknown desired benefits, but presumably eat yogurt because of its simplicity as a meal or snack).
Your task is to determine the monetary value of the segments using the information in the following table.
Potential Marketing Variables | |||||||||
Segment | Contact cost | Response rate | Price of the current brand | # bought per year | Costs per container | Retention rate | Discount rate | Potential market size | |
Health nut | 15 | 0.08 | $2.00 | 160 | $0.75 | 0.8 | 0.01 | 5000 | |
On-the-go | 30 | 0.07 | $2.50 | 90 | $0.75 | 0.8 | 0.01 | 4000 | |
Family | 10 | 0.04 | $1.00 | 180 | $0.75 | 0.9 | 0.01 | 6000 | |
Simple | 13 | 0.03 | $1.25 | 80 | $0.75 | 0.8 | 0.01 | 7000 |
What is the customer lifetime value of each segment?
- Health nut:
- On-the-go:
- Family:
- Simply:
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