Finance Case Study: Maru Batting Center
Professor: Jeannette Monaco Student: Lydia Lin
Boys and girls age 6-15
Adults, price sensitive
Men women age 16-35, elite players
No particular interest, price sensitive
Learn how to play
Practice for the baseball season
Night out, leisure activities
Time period in the year
Preseason months of Feb and March
Cost workers labor cost ￥1,500/hr
Sponsored…show more content…
3. Which is the most attractive customer segment for MBC to target? Explain your reasoning.
In my opinion, I think the “Little Leaguers” is the most attractive customer segment for MBC to target.
First of all, due to the reason that most of the children in Japan tend to play softball and baseball, Little Leaguers has a high retention rate of 75%. This is really high compare to other customer segments. 10% of their customers become regular customers. And their core segment is really large as well. All of these above reflected the large amount of customers that Maru can gain.
Second, though this segment needs two workers and one instructor, their parents are still willing to pay extra more to let their children experience and learn from the batting center, which results a ¥500 in their hourly margin. Comparing to other segments, Little Leaguers might have the lowest hourly margin, however, every customer purchased ten hours (second high among all segments) in average per year, which lead them to ¥5,000 for their annual margin.
Third, the acquisition of customers with the cost of ¥10,000 isn’t too large to cover up with the profit in following years. The middle school teams that Maru sponsored will receive clothes with MBC logo and phone number on the arms. And the MBC advertisement will also be shown on the league rulebooks. This is a great placement marketing that can efficiently increase