Assume you are managing a small business.  You have sales of $1,000,000 and a marketing budget of $100,000.  You have 100 existing customers.  The reasoning for your answers below is important.

 

1) How much of the $100,000 marketing budget do you spend on your existing customers?  Why?

 2) How much of the $100,000 marketing budget do you spend on going after new customers?  Why? 

 3) How do you decide on the division of this budget?

4) Describe 3 marketing programs that you would implement to appeal to your existing customers:

 5) Describe 3 marketing programs that you would implement to appeal to your new customers:

 6) How does relationship marketing fit into your answers above?

7) How will your answers above increase the chances of your business being more profitable?