Answered: A) What is the CCA (Cost of Customer…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Transcribed Image Text:Pepperidge Farms, makers of quality baked goods has increased its sales in the U.S. by a minimum of 15% each year for the past 10 years. In 2021, they will be launching products (3) into a new food space: Specialty Treats for Dogs. This represents an entirely new Customer Segment and as result, will require heavy spend to capture Market Share in this competitive space. As Marketing V.P., you are preparing a presentation to senior management. One of the items you feel is important to cover is the Cost of Customer Acquisition (CCA). Your Brand Director for Pepperidge Farms Specialty Dog Treats has determined that it will cost $1,00,000 in total for all Marketing activities for these 3 new products with entirely new customers. She estimates that this will result in a total of 5,000 NEW customers in the calendar year 2021. Initial projections are that this will carve out a 7% Market Share for this Market Segment, with sales totaling $500,000 the first year, $1,000,000 in year 2, and $2,800,000 in year 3. A) What is the CCA (Cost of Customer Acquisition) in 2021 for the above projections? Show your work in addition to your answer $ B) Based on the above answer (A), what would be the expected CLV (Customer Lifetime Value) goal for EACH individual customer? $

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