Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $25,658 and has a margin of 7%. Based on historical averages, 88% of people buying a new vehicle at Eastern will return for service 7 times over the next 5 years. Though it varies considerably, Eastern generates approximately $98 in margin on each service visit after accounting for parts and direct labor costs. Not including service, what is the average dollar margin for each new vehicle sold?
Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $25,658 and has a margin of 7%. Based on historical averages, 88% of people buying a new vehicle at Eastern will return for service 7 times over the next 5 years. Though it varies considerably, Eastern generates approximately $98 in margin on each service visit after accounting for parts and direct labor costs. Not including service, what is the average dollar margin for each new vehicle sold?
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
Related questions
Question
Need help very urgent
Only typed answer needed
I request you please skip fast if you have no knowledge

Transcribed Image Text:Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time
horizon of a customer who purchases a new vehicle. The average vehicle sells for $25,658
and has a margin of 7%. Based on historical averages, 88% of people buying a new vehicle
at Eastern will return for service 7 times over the next 5 years. Though it varies
considerably, Eastern generates approximately $98 in margin on each service visit after
accounting for parts and direct labor costs.
Not including service, what is the average dollar margin for each new vehicle
sold?
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps

Recommended textbooks for you

Principles Of Marketing
Marketing
ISBN:
9780134492513
Author:
Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:
Pearson Higher Education,

Marketing
Marketing
ISBN:
9781259924040
Author:
Roger A. Kerin, Steven W. Hartley
Publisher:
McGraw-Hill Education

Foundations of Business (MindTap Course List)
Marketing
ISBN:
9781337386920
Author:
William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:
Cengage Learning

Principles Of Marketing
Marketing
ISBN:
9780134492513
Author:
Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:
Pearson Higher Education,

Marketing
Marketing
ISBN:
9781259924040
Author:
Roger A. Kerin, Steven W. Hartley
Publisher:
McGraw-Hill Education

Foundations of Business (MindTap Course List)
Marketing
ISBN:
9781337386920
Author:
William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:
Cengage Learning

Marketing: An Introduction (13th Edition)
Marketing
ISBN:
9780134149530
Author:
Gary Armstrong, Philip Kotler
Publisher:
PEARSON


Contemporary Marketing
Marketing
ISBN:
9780357033777
Author:
Louis E. Boone, David L. Kurtz
Publisher:
Cengage Learning