Question
It's 2019, and the Montreal Alouettes Football organization is contemplating a sales promotion to boost their game attendance for their final game of the season.
It's 2019, and the Montreal Alouettes Football organization is contemplating a sales promotion to boost their game attendance for their final game of the season. So far in 2019, the game attendance has averaged 18,000 fans. The capacity of the stadium is 21,000 fans, and the team estimates that the game will be filled to capacity if this particular sales promotion is undertaken. The promotion will involve the giveaway (i.e. FREE!) of a hot dog, a cola drink, and a serving of French fries to each attendee. The cost of each giveaway to the organization is $1.00. It will also cost $25,000 to advertise the promotion. The average ticket price for a game is $50.00On average, each game attendee also buys $10 of food and beverage and merchandise, with the organization's margin on that particular revenue being 60%. (N.B. Assume that will remain the same, even if the promotion is run.) The organization does not undertake any promotions unless the ROMI is greater than 100%.
QUESTION: Should the football club undertake this promotion? Why or why not?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started