Question
Please answer this question using the formula shown as an image! Also, please show working in detail! Adidas estimates that it can persuade Ms. Consumer
Please answer this question using the formula shown as an image! Also, please show working in detail! Adidas estimates that it can persuade Ms. Consumer to start using Adidas shoes and to continue purchasing Adidas shoes for the next three years, with likelihood decreasing by 10% (100%, 90%, 80%, etc.). Marketing activities to get her to start using Adidas shoes are estimated at $50, and she is expected to spend $100 on a pair of Adidas shoes every year, with the variable costs for each pair of shoes being $40. Using a discount rate of 15%, what is her CLV to Adidas?
CLV = 92-cphong T (p: - Cry -- AC (1 + i)* where Pe = price paid by a consumer at time t, Ct = direct cost of servicing the customer at time t, = discount rate or cost of capital for the firm re = probability of a customer repeat buying at time AC = acquisition cost T = time horizon for estimating CLVStep 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