Maru Case Analysis & Learning Summary
Autor: ganesh naphade • February 19, 2016 • Case Study • 1,215 Words (5 Pages) • 5,717 Views
“Maru”Case Analysis & Learning Summary
Q1 What is the customer acquisition cost for Maru Batting Center for the following customers?
Ans: Acquisition cost = Contact cost / Response rate
For Little Leaguer, Acquisition cost = ¥1,000 / 10% = ¥10,000
Summer Sluggers, Acquisition cost =1500/15%=10000
Print Ad, Acquisition cost = 300/0.5%= 60000
Entertainment seekers, Acquisition cost = 50/2.5%= 2000
Q2. Without discounting cash flows to take into account the time value of money, how soon will MBC break even on the following customers?
Ans: Example :Break-Even for Little League Customer
Year 1 Year 2 Year 3
Hourly revenues ¥6,500 ¥6,500 ¥6,500
Hourly costs ¥6,000 ¥6,000 ¥6,000
Hourly margin ¥500 ¥500 ¥500
Annual hours 10 10 10
Annual margin ¥5,000 ¥5,000 ¥5,000
Customer acquisition cost ¥10,000
Annual profit (¥5,000) ¥3,750 ¥2,813
Cumulative profit to date (¥5,000) (¥1,250) ¥1,563
Q3. Taking into account the time value of money and assuming that 100 percent of a customer segment will have experienced attrition once the net present value of annual profits per customer falls below ¥100, what is the lifetime value to MBC of the following customers?
Ans: Example Lifetime Value calculation for Elite Ballplayers
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Elite Ballplayers (Print Ad) |
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Hourly Revenues | ¥7,500 | ¥7,500 | ¥7,500 | ¥7,500 | ¥7,500 |
Hourly Costs | ¥6,000 | ¥6,000 | ¥6,000 | ¥6,000 | ¥6,000 |
Hourly Margin | ¥1,500 | ¥1,500 | ¥1,500 | ¥1,500 | ¥1,500 |
No. of Annual Hours | 20 | 20 | 20 | 20 | 20 |
Annual Margin ¥ | ¥30,000 | ¥30,000 | ¥30,000 | ¥30,000 | ¥30,000 |
Survival Rate | 100.0% | 60.0% | 36.0% | 21.6% | 13.0% |
Customer Acquisition Cost | ¥60,000 |
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Annual Profit | (¥30,000) | ¥18,000 | ¥10,800 | ¥6,480 | ¥3,888 |
NPV of Annual Profit | (¥30,000) | ¥16,364 | ¥8,926 | ¥4,869 | ¥2,656 |
Cumulative Profit to Date | (¥30,000) | (¥12,000) | (¥1,200) | ¥5,280 | ¥9,168 |
NPV of Cumulative Profit to Date | (¥30,000) | (¥13,636) | (¥4,711) | ¥158 | ¥2,813 |
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Q4: Which is the most attractive customer segment for MBC to target? Explain your reasoning.
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