Colruyt Group (a Belgian retailer) introduces reusable bags for fruit and vegetable purchases (from bulk). The...

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Colruyt Group (a Belgian retailer) introduces reusable bags for fruit and vegetable purchases (from bulk). The company eliminates disposable bags from its stores; shoppers can buy the reusable bags if they need a bag. However, Colruyt provides 2 reusable bags for free to its Xtra loyalty program members. The loyalty program has around 5.1 million members and the cost of one reusable bag is $0.3. • What is the maximum cost Colruyt has to bear due to its initiative? Colruyt classifies its loyalty program members based on two criteria: activity and responsiveness to special promotions. The distribution of the members is as follows (based on long-term historical data): Designation Active member Passive member (l.e., did not purchase anything in the past 3 months) No reaction to any promotions 7% 31% React to big promotions only 24% 16% React to every promotion 20% 2% • Assuming that this is a big promotion what is the estimated cost of the promotion (use Excel for calculation)? Colruyt started to roll out the initiative in eight pilot stores. Response from loyalty program members can be seen below. Store Number of loyalty program members connected to this store members claiming the 2 free Percentage of loyalty program reusable bags 8,210 53% 12 9,824 57% 3 7,211 48% 4 8,935 74% 5 9,367 65% 12,698 79% 7 11,325 68% 18 9,601 47% • Based on the results of the pilot, should we expect that the percentage of loyalty program members responding to this promotion will change from the historical average (use Excel for calculation)? Colruyt Group (a Belgian retailer) introduces reusable bags for fruit and vegetable purchases (from bulk). The company eliminates disposable bags from its stores; shoppers can buy the reusable bags if they need a bag. However, Colruyt provides 2 reusable bags for free to its Xtra loyalty program members. The loyalty program has around 5.1 million members and the cost of one reusable bag is $0.3. • What is the maximum cost Colruyt has to bear due to its initiative? Colruyt classifies its loyalty program members based on two criteria: activity and responsiveness to special promotions. The distribution of the members is as follows (based on long-term historical data): Designation Active member Passive member (l.e., did not purchase anything in the past 3 months) No reaction to any promotions 7% 31% React to big promotions only 24% 16% React to every promotion 20% 2% • Assuming that this is a big promotion what is the estimated cost of the promotion (use Excel for calculation)? Colruyt started to roll out the initiative in eight pilot stores. Response from loyalty program members can be seen below. Store Number of loyalty program members connected to this store members claiming the 2 free Percentage of loyalty program reusable bags 8,210 53% 12 9,824 57% 3 7,211 48% 4 8,935 74% 5 9,367 65% 12,698 79% 7 11,325 68% 18 9,601 47% • Based on the results of the pilot, should we expect that the percentage of loyalty program members responding to this promotion will change from the historical average (use Excel for calculation)?

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COLRUT GROUP Number of people in loyality program 51 million Cost o... View the full answer