Practice problems 7

Q6. Based on some assumptions, an analyst calculated the customer lifetime value for an Auto-Pay customer as $1200 and Non-Auto-Pay customer as $1000. In order to persuade customers to switch to Auto-Pay from Non-Auto-Pay, what is an appropriate promotion amount to spend? (1) $100 (2) $500 (3) $1000 (4) $1200 Q7 . A catalogue marketer has 1000 customers. The contribution margin of the consumers is $100 on average. The retention rate is 60% on average and no retention spending. Assume a 15 percent discount rate. What is the customer life time value on average? Q8. Marketing spend on consumers can be categorized into: (1) Acquisition (2) Development (3) Retention (4) All of the above Q9 . Mario Brothers pizza provides a subscription weekly meal delivery service. What is the long-term multiplier? Average monthly net margin: $25 Retention rate (r): 95% Monthly discount rate (s): 2% a) 14.57 b) 13.57 c) $364.25 d) $25 Question 10 : Demographic variables are so frequently used in market segmentation because they: a) Create smaller segments than other data b) Create easy to reach segments than other data c) Are easy to measure compared to other data d) Have fewer attributes compared to other data Question 11 : As a marketing manager, what should you look at in the regression output to determine the significance of the relationship among variables? a) P-value b) R-squared c) Coefficients