We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Maru Batting Center Essay Sample

essay
The whole doc is available only for registered users OPEN DOC
  • Pages:
  • Word count: 674
  • Category: cost value

A limited time offer!

Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

Maru Batting Center Essay Sample

1. What is the customer acquisition cost to Maru Batting Center for the following customers?
a. A little leaguer = 10,000
b. A summer slugger= 10,000
C. An elite ballplayer is MBC places the ad in the local baseball enthusiasts magazine= 60,000 d. An elite ballplayer is MBC purchases the list and invites all target customers to the gala event= 50,000 e. An entertainment seeker = 2,000

2. Without discounting cash flows to take into account the time value of money, how soon will MBC break even on the following customers? In all cases, assume that revenues and variable costs to staff the cages occur on an outgoing basis but that the acquisition costs are a one-time event. a. A little leaguer = year 3

b. A summer slugger = year 3
C. An elite ballplayer is MBC places the ad in the local baseball enthusiast’s magazine= year 4 d. An elite ballplayer is MBC purchases the list and invites all target customers to the gala event= year 3 e. An entertainment seeker= year 2

3. Taking into account the time value of money and assuming that 100 percent of a customer segment will have experienced attrition once the net present value of annual profits per customer falls below 100, what is the lifetime value to MBC of the following customers? a. A little leaguer= 5,556

b. A summer slugger= 956
C. An elite ballplayer is MBC places the ad in the local baseball enthusiast’s magazine= 5,916 d. An elite ballplayer is MBC purchases the list and invites all target customers to the gala event= 15,916

i. Should MBC throw the gala event? Yes because it shows the highest earning e. An entertainment seeker = 117

4. Which is the most attractive customer segment for MBC to target? Explain your reasoning. Elite ballplayers are the most attractive customer segment for MBC to target even though they have high acquisition costs because their purchase is big and buys the product frequently. They are able to charge this group a higher price. Also little leaguers is an important segment to market because the kids market is larger3 and slower acquisition costs.

5. MBC has been approached by Little League representatives from the nearby Chiyoda ward who are eager to gain the jersey subsidy the Minato ward has enjoyed due to the company’s sponsorship. Because the parents of Chiyoda Little Leaguers will have to travel a greater distance, Maru believes there will be a lower response rate (8%) and a lower retention rate (65%), which she can make up by purchasing slightly lower-quality jerseys, reducing the cost of ownership to just 600 per player. However, the Chiyoda ward representatives demand that theirs be the only ward receiving such a sponsorship, which means MBC must choose between the two wards.

The Chiyoda representatives argue that because their ward has twice the number of Little League customers, it is more attractive than the Minato ward. Should MBC pursue the Chiyoda ward sponsorship? Explain your reasoning. No. Because the customer lifetime value decreased to 4,615. They would need to see the total lifetime value of the customers. Capacity would be an issue. Good demand and knowledge of the different location would be essential. Local competitors may be better at knowing their customer. It is easier to retain clients than to win them back.

6. Maru’s brother suggested she focus on the Elite Ballplayers segment, targeting it by offering a 500 discount on all future purchases to elite ballplayers who purchase at least twenty batting cage hours in year 1. (assume all elite ballplayer customers book exactly 20 hours each year) although this will decrease the amount MBC can bill Elite ballplayers from (7,500 to 7,000 per hour from year 2 onward), Maru believes it will increase the retention rate of these customers to 75% immediately. Should MBC offer this promotion? Explain your reasoning. Yes they should. The customer lifetime value increases to 22,656. This is an increase of almost 7,000 by increasing the retention rate.

We can write a custom essay

According to Your Specific Requirements

Order an essay
Get Access To The Full Essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59
Become a Member