Measure Marketing Help!

Acquisition

Wrap-It is a band of cloth tape used on hockey sticks. It sells to customers through its website. Last year, Wrap-It spent $6000 on paid search advertisements. The ads led 14,200 people to become first-time buyers. 1. Based on this information, calculate average customer acquisition cost for Wrap-It last year. (3 points)

Wrap-It sells a roll of tape for $3.75. The selling price includes a 46.7% profit margin. 2. What is the cost for a roll of tape? (1 point) 3. What is the net profit per customer (revenue less product and acquisition cost) if the average purchase per customer was 6 rolls of tape? (4 points)

4. Comment in space below on the cost to acquire a customer compared to net profit per customer. Is the acquisition cost to get a customer a good investment for Wrap-It, in your opinion? (3 points) Answer: Wrap-it spent only $0.42 to aquire a customer. Each customer aquired genrates $10.08 net profit on $22.50 revenue (a 45% margin after marketing cost). This cost is reasonable given the per customer profit.

Price Premium

Competition in the organic coffee category is very crowded. A group of brands competing against each other are listed below. Price for a 16-ounce bag of coffee is shown for for each brand: - Stone Street ($14.99) - Death Wish ($18.99) - The Bean Coffee Company ($13.65) - Tiny Footprint ($12.65) - San Diego Coffee ($13.99) - Military Grade ($18.95) 5. Calculate a benchmark price to use to determine price premium taking an unweighted average. (2 points)

6. Calculate the price premium % for each of the six coffee brands listed above. (6 points)

Res Price PGV Elasticity

7. BlendCo is about to bring to market a food processor/blender product and seeks to set an optimal price. It conducts a consumer survey to learn what people are willing to pay for the product. The demand schedule developed from the survey appears below.

A. What is the Maximum Reservation Price? (1 point) B. Calculate total contribution margin for each price in the table above. (4 points) C. Enter the price BlendCo should set on the new product in the cell for Optimal Price. Why should this price be charged? (3 points) Answer: The $185 price should be charged as this is the price point where total contribution is highest.

Tide and Purex are brands of laundry detergent. Review a summary of price and quantity demanded information for each brand in the table to the right. 8. Calculate elasticity of demand for each brand. (4 points) 9. Which brand is more sensitive to a price increase (i.e., demand would change more)? Why might the brand be more have greater elasticity than the other brand? (4 points) Answer: Purex has a higher elasticity. That is, a decrease in demand is more sensitive to a price increase than Tide. One explanation for this might be that Tide has stronger brand loyalty or more brand equity. This stronger brand loyalty will lessen the effect of a higher price on demand than a brand with less loyalty.

Clickthrough & Costs

Divine Bakery ran a Facebook ad campaign in the two weeks leading up to Thanksgiving to promote desserts. The ad included a link to a 10% off coupon accessible when the ad was clicked. Data in Facebook Ads Manager indicated the following results: - Impressions = 43,300 - Ad clicks = 853 - Total Ad Cost = $140 ($10 a day for 14 days)

8. What was the clickthrough rate for the ad campaign? (3 points) 9. What was the cost per click for the ad campaign? (3 points)

Transaction data from the two weeks the ad ran revealed that 92 coupons were redeemed, resulting in $1,769 in sales. 10. What was the Cost per Order for the ad campaign? (3 points) 11. What was the Conversion Rate for the ad campaign? (3 points)

Ecommerce +Email

Tees to Please is an online seller of novelty t-shirts. A review of its website analytics for last week included the following data: - Shopping carts initiated = 2,699 - Shopping carts completed = 2,101 - Merchandise value in abandoned carts = $12,300 12. What was the cart abandonment rate last week? (3 points)

As a follow-up to shoppers that started a cart but did not complete a transaction, Tees to Please sent emails to 598 shoppers with an offer for 20% off their total purchase. The results of that effort were: - Number of emails delivered = 590 - Number of clicks on emails sent = 239 - Number of clicks on link to coupon = 201 - Number of offer redemptions = 173 - Total revenue = $22,455 13. What was the open rate for the the follow-up email? (3 points) 14. What was the clickthrough rate for the follow-up email? (3 points) 15. What was the conversion rate for the follow-up email? (3 points)

Aeries Clean Energy sells environmentally friendly energy solutions to governments and businesses. One of its key communication channels is a monthly newsletter. An intern is tracking activity of the company's opt-in email list and must report to her supervisor the unsubscribe rate and overall trend of the email list. Below is select data from recent months: Date No. of Email List Subscribers No. of Unsubscribe Requests for Month 11-01-17 652 19 10-01-17 553 17 09-01-17 500 15 16. What was the unsubscribe rate for November? (2 points) 17. In the space below, comment on the overall state of the company's email list (getting better? getting worse? no change?). Give evidence to support your position. (4 points) Answer: The overall list is improving. Unsubscribe rate has dropped slightly between September and November as the rate of growth in subscribers exceeded the increase in numbers of unsubscribers each month.

Sheet1