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 30% 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 $40 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?

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Lets break down the calculations 1 Discounted Massage Price for Groupon 90 1 30 90 07 63 2 ... View full answer

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