Hello, please help me answer the 3 questions at the bottom of the question.

BB Sports is in the business of manufacturing and selling shoes. It carries several product lines. The basketball shoe line accounts for $170million in sales ($170 per pair x 1,000,000 pairs) in 2018. The current marketing spend on this line is $4.5million.

In order to grow sales of this shoe line, the company is considering two market growth strategies, namely market penetration vs. a new product development for 2019 in addition to its current marketing activities.

The market penetration strategy is anticipated to increase current sales of this product line from $170 million to $183.6 million in 2019. In addition to its current level of marketing spend, it hopes to discount the basketball shoes at a 10% price discount. At this price point, BB Sports hopes to sell 1.2 million pairs of basketball shoes in 2019. This discount cost will be charged to its current marketing spend.

The second alternative would be to develop a new line of basketball shoes. The new product development strategy is forecasted to increase current sales of this product line from $170 million to $200 million with an additional marketing spend of $2.5 million.

BB Sports uses contribution to assess financial value and the contribution on basketball shoes averages to 45%.

1. Calculate the Marketing Return on Investment (MROI) for both market growth strategies.

2. Along with their current marketing activities, which market growth strategy should BB Sports pursue? Why?

3. What factors should the company consider other than MROI?