Choi Han-kyul is the owner of the Coffee Prince, he is considering to launch a new coffee line using beans imported from Vietnam.
marketing
Description
QUIZ 1
There is only 01 sections: Section A.
Please fulfill the requirements.
SECTION A: Open Questions – 5
questions x 20 points – Total: 100 points
QUESTION 1
Choi Han-kyul is the owner of the Coffee
Prince, he is considering to launch a new coffee line using beans imported from
Vietnam. The new coffee line is very similar to the store’s most popular “Americano”,
which used Brazilian beans. Due to the country of origin, the new coffee line
is generally cheaper to make but it would cost a bit more to marketing. The
following table shows the cost break-down.
|
|
Fixed Cost |
Variable Cost |
Price |
|
Americano |
$3.50 |
$1.50 |
$9.90 |
|
New Coffee Line |
$1.50 |
$2.00 |
$6.90 |
Analysis suggests that the unit cannibalization
rate of the new coffee line will be 90% in its initial year, and drop 10% annually
in sequence.
If Choi Han-kyul expects to sell 100 cups of
the New Coffee Line per month (compare to 300 cups of the Americano), should the
Coffee Prince proceed with the introduction?
QUESTION 2
Calculate the Return on Marketing Cost
between the Americano and the New Coffee Line in Question 1.
=> Americano
= $9.9- ($3.5+$1.5) /( $ 3.5+ $1.5) =
QUESTION 3
What is the Brand Equity of the Americano and
the New Coffee Line in Question 1.
QUESTION 4
The Coffee Prince ran a survey on its loyal
customers and found out the results:
|
Customer Group |
Member |
Silver VIP |
Gold VIP |
Platinum
VIP |
VVIP |
|
Avg Expenditure per visit |
9.90 |
8.50 |
8.00 |
15.00 |
12.00 |
|
Avg Purchase Cycle per week |
1 |
3 |
5 |
5 |
7 |
Could you calculate the Customer Lifetime Value
for the Coffee Prince?
*Given that, the average customer lifespan is
20 years for Coffee Shop in Korea. The customer retention rate in this case is
75%. Profit margin is 49.5%. Rate of discount is 10%.
QUETION 5
Go Eun-cha, the marketing manager of the Coffee
Prince, approaches Choi Han-kyul with a proposal. She wants to spend $60,000 on
an advertisement reaching 15,000 new prospects. She expects the advertisement
to convince 25% of the prospects to take advantage of a special discount to
enjoy an Americano for only $5.90, is the advertisement economically attractive?
