Question One Use the Consumer Figures Case Study numbers (in the Word doc) and determine from an overall profitability standpoint, which is better:

• The starting numbers in the case
• OR
• An offer of 2 Honeybell Cheesecakes for $79.00 with the following changes
• 1.05% Average Response, 50% COGS, $8.00 Fulfillment, and Response per Year of 16%, 13%, and 11% (No other changes)

• Consumer Figures: Business Figures: Space Ad Figures: Cost to reach a prospect $0.60 $0.70 $0.01 Average response 1.10% 0.90% 0.51% Average initial order $70.00 $80.00 $19.95 Average COGS 50.00% 50.00% 70.00% Initial Fulfillment Cost $7 $8 $4 Cost to reach a customer $0.50 $0.50 $0.50 Number of customer mailings/year 4 4 4 Response per mailing year one 16.00% 24.00% 8.00% Response per mailing year two 13.00% 16.00% 6.00% Response per mailing year three 11.00% 12.00% 4.00% Time Value of Money Discount 20.00% 20.00% 20.00% Average repeat order $75.00 $150.00 $30.00 Average repeat COGS 50.00% 50.00% 55.00% Repeat Order fulfillment Cost $6 $7 $5