Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A farm equipment company was considering a direct mail campaign to remind customers to have tractors serviced before spring planting. The campaign is expected to

image text in transcribed
A farm equipment company was considering a direct mail campaign to remind customers to have tractors serviced before spring planting. The campaign is expected to cost $1,000 and increase revenues from $45,000 to $50,000. Baseline revenues for tractor servicing (i.e. revenues with no marketing expenditures whatsoever) were estimated at $25,000. The direct mail campaign was in addition to the regular advertising and other marketing activities costing $6,000. Contribution on tractor servicing revenues (after parts and labor) averages 60%. a) Calculate the ROI for the direct mail campaign alone. (6 points) b) Calculate the ROI for the company's total marketing spend (i.e. the regular marketing budget plus the direct mail campaign). (4 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Residential Lease

Authors: Mindy Sorensen Prints

1st Edition

B0CFWZFPN6

More Books

Students also viewed these Finance questions

Question

1. What is meant by Latitudes? 2. What is cartography ?

Answered: 1 week ago

Question

What is order of reaction? Explain with example?

Answered: 1 week ago