2-1 Homework Assignment Info_ Acquisition and Retention Resources

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Feb 20, 2024

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2-1 Homework: Acquisition and Retention Resources Final Project Company Annual Revenues Marketing Expenses MKT % Spend Acquired Customers Retained Customers Starbucks $25,876M $1,035M 4% 120M 207M Prompt Specifically, the following critical elements must be addressed: ● Customer Acquisition Cost: Calculate the acquisition costs based on the marketing expenses and acquired customers for your selected company. Use the percentage of 70% marketing spend on acquiring new customers. Substantiate your calculations with specific examples. ● Customer Retention Cost: Conversely, the remaining 30% of the marketing budget will be spent on retaining customers. Calculate your selected company’s retention costs. ● Product Acquisition Cost: For your new selected product that you will be using for the final project, determine how many new customers will be acquired in Yr1—and determine your specific marketing spending to launch this service. Calculate your acquisition cost for your new product. First-time triers in period = total pop (#) * Trial rate (%) Trial rate (%) = percentage of a defined population that purchases or uses a product for the first time in a given period 74% of revenue is from beverages 71% of revenue is from North America Approximately 40% of Starbucks customers are aged between 25-40 years old. Target Market for new product: North America (US & Canada) - 71% of sales Tea drinkers in North America - 25% of beverage customers ● Recommendations: Based on the Customer Acquisition vs. Retention Costs article and your findings, what recommendations would you make in terms of your selected

2-1 Homework: Acquisition and Retention Resources company’s acquisition and retention costs? How does your new product acquisition cost compare to its existing marketing spending to acquire new customers and retain existing client base? References https://www.investopedia.com/articles/markets/021316/how-starbucks-makes-money-sbux.asp https://zipdo.co/statistics/starbucks-customers/ https://www.restobiz.ca/tea-and-coffee-trends-what-todays-consumers-want/

2-1 Homework: Acquisition and Retention Resources

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