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please list solution step by step Stu's Mellow Meter Miser (MMM) recently hired a new CFO who is determined to assess the productivity of marketing
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Stu's Mellow Meter Miser (MMM) recently hired a new CFO who is determined to assess the productivity of marketing budgets. Martha Ray, the marketing manager assembled data on marketing budgets and sales from the last three years. She then used a regression to model seasonality and the effects of marketing to estimate baseline sales for any given month. The next step was to sequentially implement three different promotions and evaluate their relative profitability. In August Martha spent $1,900 on a full-page ad in Illustrious Mechanics. In September she ran a special "back-to-school" price promotion of $32 instead of the regular selling price of $38 per Meter Miser. Finally, in October, Martha dropped $5.00-off FSI coupons reaching 1,000,000 households at an average CPM of $4.76. Baseline sales estimate for August were 1,200 units. September and October baselines, respectively, were +20% and -10% of the August baseline. Meter Miser contribution margins (before marketing) at regular prices are 44% of sales. What incremental sales level (in units) would the September promotion have to achieve in order to increase total contribution by $10,000? New CFO wondering what exactly a mellow Stu's Mellow Meter Miser (MMM) recently hired a new CFO who is determined to assess the productivity of marketing budgets. Martha Ray, the marketing manager assembled data on marketing budgets and sales from the last three years. She then used a regression to model seasonality and the effects of marketing to estimate baseline sales for any given month. The next step was to sequentially implement three different promotions and evaluate their relative profitability. In August Martha spent $1,900 on a full-page ad in Illustrious Mechanics. In September she ran a special "back-to-school" price promotion of $32 instead of the regular selling price of $38 per Meter Miser. Finally, in October, Martha dropped $5.00-off FSI coupons reaching 1,000,000 households at an average CPM of $4.76. Baseline sales estimate for August were 1,200 units. September and October baselines, respectively, were +20% and -10% of the August baseline. Meter Miser contribution margins (before marketing) at regular prices are 44% of sales. What incremental sales level (in units) would the September promotion have to achieve in order to increase total contribution by $10,000? New CFO wondering what exactly a mellowStep by Step Solution
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