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Maru Case Analysis & Learning Summary

Autor:   •  February 19, 2016  •  Case Study  •  1,215 Words (5 Pages)  •  5,814 Views

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“Maru”Case Analysis & Learning Summary

Q1 What is the customer acquisition cost for Maru Batting Center for the following customers?

Ans:      Acquisition cost = Contact cost / Response rate

For Little Leaguer, Acquisition cost = ¥1,000 / 10%    = ¥10,000

Summer Sluggers, Acquisition cost =1500/15%=10000

Print Ad, Acquisition cost = 300/0.5%= 60000

Entertainment seekers, Acquisition cost = 50/2.5%= 2000

Q2.  Without discounting cash flows to take into account the time value of money, how soon will   MBC break even on the following customers?

Ans: Example :Break-Even for Little League Customer

                                Year 1                        Year 2                Year 3        

Hourly revenues                   ¥6,500                   ¥6,500                   ¥6,500

Hourly costs                         ¥6,000                     ¥6,000                   ¥6,000

Hourly margin                         ¥500                        ¥500                      ¥500

Annual hours                               10                            10                          10

Annual margin                      ¥5,000                     ¥5,000                   ¥5,000

Customer acquisition cost           ¥10,000                                                

Annual profit                           (¥5,000)                   ¥3,750                   ¥2,813

Cumulative profit to date        (¥5,000)                  (¥1,250)                   ¥1,563 

Q3.  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?

Ans: Example Lifetime Value calculation for Elite Ballplayers

 

Year 1

Year 2

Year 3

Year 4

Year 5

Elite Ballplayers (Print Ad)

 

 

 

 

 

Hourly Revenues

¥7,500

¥7,500

¥7,500

¥7,500

¥7,500

Hourly Costs

¥6,000

¥6,000

¥6,000

¥6,000

¥6,000

Hourly Margin

¥1,500

¥1,500

¥1,500

¥1,500

¥1,500

No. of Annual Hours

20

20

20

20

20

Annual Margin ¥

¥30,000

¥30,000

¥30,000

¥30,000

¥30,000

Survival Rate

100.0%

60.0%

36.0%

21.6%

13.0%

Customer Acquisition Cost

¥60,000

 

 

 

 

Annual Profit

(¥30,000)

¥18,000

¥10,800

¥6,480

¥3,888

NPV of Annual Profit

(¥30,000)

¥16,364

¥8,926

¥4,869

¥2,656

Cumulative Profit to Date

(¥30,000)

(¥12,000)

(¥1,200)

¥5,280

¥9,168

NPV of Cumulative Profit to Date

(¥30,000)

(¥13,636)

(¥4,711)

¥158

¥2,813

 

 

 

 

 

 

Q4: Which is the most attractive customer segment for MBC to target? Explain your reasoning.

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