If we know that the average revenue of a particular manufacturing product is $75, frequency of repurchase is six times per year, contribution margin is 10%, and average customer defection rate is 25%: (a) What is the average value of a loyal customer (VLC) in a target market segment? (b) (c) Analyse how the value of a loyal customer (VLC) will change if the average customer defection rate varies between 15% and 40% (in increments of 5%) and the frequency of repurchase varies between 3, 4, 5, 6, 7, 8 and 9 times per year. Plot the graph or use Excel table to illustrate the impact of these assumptions on the VLC. Explain in less than 1,000 word, on the impact of average customer defection rate and frequency of repurchase. What have you learned from this VLC?
If we know that the average revenue of a particular manufacturing product is $75, frequency of repurchase is six times per year, contribution margin is 10%, and average customer defection rate is 25%: (a) What is the average value of a loyal customer (VLC) in a target market segment? (b) (c) Analyse how the value of a loyal customer (VLC) will change if the average customer defection rate varies between 15% and 40% (in increments of 5%) and the frequency of repurchase varies between 3, 4, 5, 6, 7, 8 and 9 times per year. Plot the graph or use Excel table to illustrate the impact of these assumptions on the VLC. Explain in less than 1,000 word, on the impact of average customer defection rate and frequency of repurchase. What have you learned from this VLC?
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:If we know that the average revenue of a particular manufacturing product is $75, frequency
of repurchase is six times per year, contribution margin is 10%, and average customer defection
rate is 25%:
(a)
What is the average value of a loyal customer (VLC) in a target market segment?
(b)
(c)
Analyse how the value of a loyal customer (VLC) will change if the average customer
defection rate varies between 15% and 40% (in increments of 5%) and the frequency
of repurchase varies between 3, 4, 5, 6, 7, 8 and 9 times per year. Plot the graph or use
Excel table to illustrate the impact of these assumptions on the VLC.
Explain in less than 1,000 word, on the impact of average customer defection rate and frequency
of repurchase. What have you learned from this VLC?
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