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2. (5 points) A catalog retailer is preparing to release a new catalog. They initially tested the response to the catalog in a subset of
2. (5 points) A catalog retailer is preparing to release a new catalog. They initially tested the response to the catalog in a subset of their customers. In the initial test, they reached out to 30,000 customers and sent them a copy of the catalog, which costs $0.55.980 customers made a purchase, spending an average of $75. The retailer's margin is 40% (i.e., variable costs are 60%). a. What was the gross profit in dollars of this test mailing? b. What was the gross profit as a percent of gross sales? c. What was the return on marketing expenditures (gross profit as a function of marketing costs)? d. What was the breakeven for this campaign? e. The marketer now engages in RFM analysis. They identify that RFM cell 452 had a response rate of 3.20%. What is the breakeven index for that group
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