You operate a Caribbean destination resort. You currently offer plans for a cruise departing from the resort and plans for a casino stay. It is expected that in 2021 there will be some return to more normal travel. You will re-launch your advertising for 2021 announcing that customers will be able to do both for one price. Your marginal cost per customer across both tours is $4800. Customer Preferences Cruise Casino Customer 1 $7,000 $3,000 Customer 2 $2,000 $6,000 You know that about 21% of your customers decline cruises because of seasickness. At least 12% decline the casino trip saying they don't believe in gambling. As a rough approximation, you estimate that approximately 33% of your customers will never bundle. Given the preferences distribution, will mixed bundling increase profits? You must show the calculations that support your conclusion.
You operate a Caribbean destination resort. You currently offer plans for a cruise departing from the resort and plans for a casino stay. It is expected that in 2021 there will be some return to more normal travel. You will re-launch your advertising for 2021 announcing that customers will be able to do both for one price. Your marginal cost per customer across both tours is $4800.
Customer Preferences
|
|
Cruise |
Casino |
|
Customer 1 |
$7,000 |
$3,000 |
|
Customer 2 |
$2,000 |
$6,000 |
You know that about 21% of your customers decline cruises because of seasickness. At least 12% decline the casino trip saying they don't believe in gambling. As a rough approximation, you estimate that approximately 33% of your customers will never bundle. Given the preferences distribution, will mixed bundling increase profits? You must show the calculations that support your conclusion.
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