- Use the Consumer Figures Case Study numbers (in the Word doc) and determine from an overall profitability standpoint, which is better:

• The starting numbers in the case
• OR
• An offer of 2 Honeybell Cheesecakes for $79.00 with the following changes
• 1.05% Average Response, 50% COGS, $8.00 Fulfillment, and Response per Year of 16%, 13%, and 11% (No other changes)
• OR
• An offer of 2 Honeybell Cheesecakes for $70.00 with the following changes
• 1.15% Average Response, 55% COGS, $8.00 Fulfillment, and Response per Year of 17%, 14%, and 12% (No other changes)

Consumer Figures:

Business Figures:

Space Ad Figures:

Cost to reach a prospect

$0.60

$0.70

$0.01

Average response

1.10%

0.90%

0.51%

Average initial order

$70.00

$80.00

$19.95

Average COGS

50.00%

50.00%

70.00%

Initial Fulfillment Cost

$7

$8

$4

Cost to reach a customer

$0.50

$0.50

$0.50

Number of customer mailings/year

4

4

4

Response per mailing year one

16.00%

24.00%

8.00%

Response per mailing year two

13.00%

16.00%

6.00%

Response per mailing year three

11.00%

12.00%

4.00%

Time Value of Money Discount

20.00%

20.00%

20.00%

Average repeat order

$75.00

$150.00

$30.00

Average repeat COGS

50.00%

50.00%

55.00%

Repeat Order fulfillment Cost

$6

$7

$5