Eugenia Garcia is a DePaul Driehaus College of Business student majoring in Marketing with a concentration in Sales Leadership. Eugenia graduates at the end of this quarter. Following a successful internship, the previous summer, Eugenia has accepted a full-time job offer with Microsoft in the role of Associate Sales Representative with a starting annual salary of $79,500. Additionally, Eugenia will receive $500 monthly ($6,000 total annually) as a car allowance plus 72 cents per mile traveled for work given the need for Eugenia to visit customers in person across her sales territory in the Chicago metro area. Eugenia's new job starts two weeks following graduation during the same week Eugenia celebrates her 23rd birthday with family and friends. Like most urban college students, Eugenia has not owned a car while attending DePaul. Instead, she has made great use of her U-pass for public transportation throughout Chicago. Now she needs her first car before her first day at Microsoft. After reading online reviews and talking with family and friends, Eugenia decides to purchase a new Mazda MX-3 at a suggested retail price (SRP) of $27,000. She purchases the car from Autobarn City Mazda in Chicago and, assuming she remains satisfied with both Mazda and the dealer (Autobarn City), expects to trade-in her car every seven years for a new model with an SRP the same as her first purchase. The value of her trade-in will be 40% of the SRP. [Note from Geoff. The definition of trade-in is "a used article accepted by a retailer in partial payment for another." An example is "the trade-in value of the old car". Synonyms include exchange and swap.] Eugenia will have all maintenance done by Autobarn City's Service Center through the life of each vehicle at a cost to her averaging $1,000 per year. Autobarn City Mazda's cost to acquire Eugenia as a new customer is $500. Autobarn City Mazda's cost of goods sold for the Mazda MX-3 is $23,000. Autobarn City Mazda re-sells the cars Eugenia trades-in for the same price as the value provided to Eugenia at a gain/loss to Autobarn City Mazda of $0. Autobarn City Mazda's cost of goods and services sold for the annual maintenance of Eugenia's MX-3 is $500. Autobarn City Mazda's cost to serve Eugenia is $50 each year. Assume Eugenia is a loyal Autobarn City Mazda's until she retires the week of her 65th birthday after purchasing her final Mazda. Question 5 options: A) Eugenia's CLV to Autobarn City Mazda is $48,600. B) Eugenia's CLV to Autobarn City Mazda is $42,600. C) Eugenia's CLV to Autobarn City Mazda is $44,200. D) Eugenia's CLV to Autobarn City Mazda is $46,400.
Using the information in the below paragraph, what is the expected Customer Lifetime Value (CLV) of Eugenia Garcia to Autobarn City Mazda?
Eugenia Garcia is a DePaul Driehaus College of Business student majoring in Marketing with a concentration in Sales Leadership. Eugenia graduates at the end of this quarter. Following a successful internship, the previous summer, Eugenia has accepted a full-time job offer with Microsoft in the role of Associate Sales Representative with a starting annual salary of $79,500. Additionally, Eugenia will receive $500 monthly ($6,000 total annually) as a car allowance plus 72 cents per mile traveled for work given the need for Eugenia to visit customers in person across her sales territory in the Chicago metro area. Eugenia's new job starts two weeks following graduation during the same week Eugenia celebrates her 23rd birthday with family and friends.
Like most urban college students, Eugenia has not owned a car while attending DePaul. Instead, she has made great use of her U-pass for public transportation throughout Chicago. Now she needs her first car before her first day at Microsoft.
After reading online reviews and talking with family and friends, Eugenia decides to purchase a new Mazda MX-3 at a suggested retail price (SRP) of $27,000. She purchases the car from Autobarn City Mazda in Chicago and, assuming she remains satisfied with both Mazda and the dealer (Autobarn City), expects to trade-in her car every seven years for a new model with an SRP the same as her first purchase. The value of her trade-in will be 40% of the SRP. [Note from Geoff. The definition of trade-in is "a used article accepted by a retailer in partial payment for another." An example is "the trade-in value of the old car". Synonyms include exchange and swap.]
Eugenia will have all maintenance done by Autobarn City's Service Center through the life of each vehicle at a cost to her averaging $1,000 per year.
Autobarn City Mazda's cost to acquire Eugenia as a new customer is $500. Autobarn City Mazda's cost of goods sold for the Mazda MX-3 is $23,000. Autobarn City Mazda re-sells the cars Eugenia trades-in for the same price as the value provided to Eugenia at a gain/loss to Autobarn City Mazda of $0. Autobarn City Mazda's cost of goods and services sold for the annual maintenance of Eugenia's MX-3 is $500. Autobarn City Mazda's cost to serve Eugenia is $50 each year.
Assume Eugenia is a loyal Autobarn City Mazda's until she retires the week of her 65th birthday after purchasing her final Mazda.
Question 5 options:
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
