1. A subscription food delivery service, Extra Tasty, is planning to launch four precooked meal packages. They intend to hire a celebrity chef to develop the recipes offered in the four new packages: Vegan, Glu-free, MeatLove and Keto. Extra Tasty will spend $15,000 to hire a top chef to create the recipes, and $225,000 on marketing. The prices and variable costs of the meal packages are: P_Vegan = $312, VC_Vegan = $70; P_Glu-free = $280, VC_Glu-free = $62; P_MeatLove= $336, VC_MeatLove = $80; and P_Keto = $240, VC_Keto = $48. They expect to sell the packages in the ratio 4:5:7:3, respectively. The total customer base of Extra Tasty is 15,000 customers.

Assuming that spending $300,000 on advertising would have brought in 1,500 customers, spending $175,000 on ads, and offering a $40 coupon would draw 2,500 new customers, and spending $175,000 on ads, and offering a $30 coupon would draw 1,800 new customers:

Calculate the CLV for each option:

1. $300,000 on ads

2. $175,000 on ads and a $40 coupon

3. $175,000 on ads and a $30 coupon

Hint: (Ad spending/number who switched) + coupon).

ii. Calculate the total segment value for those new customers for each option. (Hint: CLV * number of new customers).