Question: Vanity Spa is considering another Groupon campaign. They typically charge $90 for a one-hour massage with a registered massage therapist (RMT). They decide to offer

Vanity Spa is considering another Groupon campaign. They typically charge $90 for a one-hour massage with a registered massage therapist (RMT). They decide to offer 100 massages at a 40% discount, and Groupon will take 50% of their revenue from this campaign. In the past, only 70% of people have redeemed their Groupon at Vanity Spa. They pay their RMTs $35 per hour. How much will they lose/gain in total for this campaign? They also know that of the people who redeem their Groupon, about 30% also buy a manicure for $30 (with a CM% of 95%). Should Vanity Spa run the Groupon campaign if they need to make at least $500 to make it worthwhile?

Question 5 options:

Yes, they should run the campaign as they will make $229.50.

None of these answers is correct.

Yes, they should run the campaign as they will make $348.50

No, they should not run the campaign, as they will only make $348.50

No, they should not run the campaign, because they will only make $229.50.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!