. Customer Lifetime Valuation:

. SOTARG Inkjet Printers A Brief Exercise

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. Julien Levy product manager in France and in charge of printers and accessories

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. Past third quarter figures makes Julien worried he will not hit this years annual sales target

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. Consequence, considers end-of-year promotion in Paris/Greater Paris Region

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. Approached by Florent Gaspard managing director of promo plus/ marketing firm

. -direct marketing firm in Suresnes

. -offered to develop and implement sales promotion campaign to boost end-of-year

. sales

. Suggested an in store promotional campaign (10 hypermarkets):

. -Carrefour (4 stores)

. -Auchan (3 stores)

. -Leclerc (2 stores)

. -Hyper U (1 store)

. Put one booth at the entrance of each hypermarket during four critical Satrudays before Christmas

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. Quote for promos pluss promotion:

. 250/day/booth includes promotional material/remuneration of sales promotion specialist

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. Julien must make a choice

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. SOTARGS customer retention rate:

. Four out of five customers continue to use inkjet printer after a full year (4 out of 5 after 12 months)

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. Many trade up for a more sophisticated printer

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. After another year only half of the four out of five continue to use inkjet printer (2 out 4 after 24 months)

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. After three years the remaining stop using

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. Customer Lifetime Value is three years

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. 200 pages w/ SOGART 100 Inkjet cartridge in other words in consumer household last three months

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. SOGART does not capture replacement cartridges

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. 15% buy SOGART compatible low cost/recyclable cartridges online or specialty retailer (household typically buys every seventh cartridge from other sources)

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. To boost sales Julien wants to sell promotional bundle during Christmas for 50.43

. -1 SOGART inkjet printer (33.45 per unit)

. -1 mediabridge hi-speed cable (3.99 per unit)

. -1 SOGART black ink cartridge (12.99 per unit)

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. SOGART higher margins on cartridge (85% profit margin) and cables (80% profit margin) than printer which are sold at a loss at (-40% profit margin)

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. SOGART forecasts annual 2% increase on products come into affect on January 1

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. Uses company wide discount rate of 10%

. Case Two Questions and Answers - Please help me answer the question below according to the information above. If you can put in excel form it would really help.

. a) What is the lifetime value of a single customer who stays with SOTARG after his/her purchase of a SOTARG inkjet printer in the current Christmas sales?