Recent orders
MKT Assignment
1. FreedomBell provides personal monitor devices for elderly customers. These devices are worn on a cord around the neck and transmit information about vitals (heartbeat, respiration, blood pressure) to the FreedomBell monitoring station. The devices also have an emergency button which, if pressed, will call FreedomBell immediately. FreedomBell monitors the device output and dispatches medical and emergency services when necessary. The device is provided free of charge to clients, but the monitoring service costs $39.99 per month. FreedomBell’s variable costs for the monitoring service are $3.12 per month. Clients have been dissatisfied with the quality of the monitor device which has a tendency to fall apart. FreedomBell is searching for a new vendor to manufacture the device in hopes of improving the device’s durability and, thus, increasing customer retention rate, which is currently 60% per month. To counteract customer churn, FreedomBell deploys an intensive marketing program and has been successful in maintaining the number of customer accounts at 1,800,000. If the newer device is used, monitoring costs will increase by $0.75 per month. FreedomBell has a monthly discount rate of 0.009 (0.9%).
a. How much does the company spend annually on total monitoring costs?
b. How many customers does FreedomBell lose each month?
c. What is the customer lifetime value?
d. If FreedomBell uses the newer device and incurs higher VC but doesn’t want the current CLV to decline, how much does the customer retention rate have to increase to maintain the current CLV?
e. For the new device to be economically effective (maintain the CLV and meet the new retention rate), how many more customers per month would FreedomBell need to keep?
2. The annual planning process at Advanced Technology Systems, Inc. (ATS) identified several new marketing initiatives for the next year. Company executives had decided to restructure its product-marketing team into two separate groups: (1) Corporate Office Systems (COS) and (2) Home Office Systems (HOS). Angel Bloch was assigned the responsibility for the Home Office Systems group, which would market the company’s word processing hardware and software for home and office-at-home use by individuals.
His marketing plan, which included an HOS sales forecast for the next year of $150 million, was the result of a detailed market analysis and negotiations with individuals both inside and outside the company. Discussions with the sales director indicated that 30 percent of the ATS sales force would be dedicated to selling products of the HOS group. Thus, under the new organizational structure, the HOS group would be charged with 30 percent of the total ATS budgeted non-commission-based sales force expenditures. The sales director’s budget for salaries and fringe benefits of the sales force and noncommission selling costs for ATS was $42 million. HOS sales representatives would receive a 12.5 percent commission on sales of home office systems.
The advertising and promotion budget for HOS contained three elements: trade magazine advertising, cooperative newspaper advertising with ATS dealers, and sales promotion materials including product brochures, technical manuals, catalogs, and point-of-purchase displays. Production and media placement costs for trade magazine advertising were budgeted at $7.5 million. ATS’s cooperative advertising allowance policy stated that the company would allocate 6 percent of sales to dealers to promote its office systems. Dealers always use their complete cooperative advertising allowances. Sales promotional materials had budgeted production costs of $2.5 million.
Meetings with manufacturing and operations personnel indicated that the direct costs of material and labor and direct factory overhead to produce the Home Office System product line represented 45% of sales. The accounting department would assign $7,200,000 in indirect manufacturing overhead (for example, depreciation, maintenance) to the product line and $2,250,000 for administrative overhead (clerical, telephone, office space, etc.) Freight for the product line would average 9 percent of sales.
Bloch’s staff consisted of two product managers and a marketing assistant. Salaries and fringe benefits for Mr. Bloch and his staff were $975,000 per year.
a. Prepare a pro forma income statement for the Home Office Systems group.
b. Mr. Bloch thought there was a good chance that HOS may not reach the goal of $150 million in sales and that sales could be as much as one-third lower at $100 million. Prepare a pro forma income statement for the Home Office Systems group given annual sales of $100 million.
c. At what level of dollar sales does the Home Office Systems group break even?
330 marketing HW
Marketing to women (and everyone else, for that matter) changed dramatically in the early to mid 20th century with the introduction of psychoanalysis as described in an old, but still relevant 4-part documentary entitled “The Century of the Self.” The psychoanalysis field led to the creation of market segments based on psychological and behavioral information, which are far richer than the traditional demographic segmentation information. We still use demographic segmentation to describe target markets, but today’s sophisticated marketer uses much, much more than just demographics.
For 10 points extra credit, watch the 8-minute snippet from the documentary called “The Century of the Self — The Engineering of Consent.”
the questions are:
- The assumption that “the masses in America are fundamentally irrational” led to the use of psychological techniques to control irrationality in mass communications (advertising and public relations). Do you think Americans are fundamentally irrational? For example, is it irrational to see expensive BMWs and Mercedes Benz autos in the Walmart parking lot? Support your answer with personal observations or citations.
- American psychologist Edward Bernays is called the father of mass persuasion. His contribution (and that of fellow psychologist Ernest Dichter) to advertising changed how products are marketed from a “needs-only” basis to a “wants” basis. This change was thought at the time to be a savior of American democracy. Dichtersaid, “The consumer may have basic needs that the consumer himself or herself doesn’tunderstand. Is it wrong to give people what they want by taking away their defenses?” What is your answer to his question?
- What have you learned from the video about the use of psychology in marketing that motivates marketers to target certain market segments?
Watch from 18 minutes 10 seconds (18:10) to Twenty-five minutes, fifty-three seconds (25:53) of “The Engineering of Consent” video:
Note: You may also want to watch the first segment of the 4-part documentary entitled “The Century of the Self — Happiness Machines” for further understanding. It is quite interesting and you get to see a lot of very old films from the early part of the 20th century.
“Happiness Machines” video: http://freedocumentaries.org/documentary/bbc-the-century-of-the-self-happiness-machines-season-1-episode-1#watch-film
Marketing Opinion
Article Review – Individual
Marketing happens all around us, every day. In order to help you recognize this, three article reviews are required. This is a form of a current events report, writing a summary that extracts and summarizes the major points relative to a particular topic area that we have discussed. This is to be written in a 750 to 1150 word, APA style, paper outlining: a) The topic considered b) summarizing the article c) stating how the article relates to your topic d) Your opinion of the article e) Two (2) “discussion questions” concerning that article. Part of what determines the quality of the article is its source. The following are suggested: Ad Week, Advertising Age, Bloomberg Business Week, Crain’s regional publications, Entrepreneur, Forbes, Fortune, Harvard Business Review, Inc., and The Wall Street Journal. See me before you choose an article from any others.
In the News” Article Written Report rubric