I’m working on a marketing case study and need an explanation and answer to help me learn.
Question 3
Bookbinders is considering a similar mail campaign in the Midwest where
it has data for 50,000 customers. Such mailings typically promote several
books. (Individual-level data of these customers is not available for your
analysis).
The allocated cost of mailing is $0.65/addressee (including postage) for the
art book, and the book costs Bookbinders $15 to purchase and mail. There
is an additional overhead for each book at 45 percent of cost of the book.
The selling price of the book is $31.95.
Based on the model, which customers should Bookbinders target? How
much more profit would you expect the company to generate using these
models as compared to sending the mail offer to the entire list?
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