Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ROI Problem-Michael Forte, founder and CEO of Northeastern Dental (ND) has created a chain of dental offices in South Florida that serve small communities outside

image text in transcribed
image text in transcribed
ROI Problem-Michael Forte, founder and CEO of Northeastern Dental (ND) has created a chain of dental offices in South Florida that serve small communities outside of the main cities. The firm was launched three year.ago and makes profit by providing dental services. However, they are not thinking about expanding into Orthodontics. The company finds itself at a fork in the road where it must ratchet up sales to continue its ambitious goals or cut costs to insure survival. Recently the firm opened four new offices as a part of its own-brand expansion plans. The company budgeted a substantial amount to promote the new offices and its Dentists. The investments were made before the recent economic downturn and are now getting a close review. The CEO is particularly focused on the firm's expenditure in the direct marketing category. You have a Direct Marketing firm that specializes in the medical and dental area. Since data on its target market show a propensity for searching for dentist via the internet and its website produces a steady stream of appointments - the CEO is skeptical of continued investments in direct marketing. You have to demonstrate what would be the Return On Investment (ROI) data on direct marketing promotions. Following please find the data available for calculation: Annual Profits: $103,000: Annual Profits attributed to Direct Mail Campaign: $30,000; Annual Profits attributed to Web Site: $45,000; Annual Direct Mail Investment: $5,150 (this would be what they pay for your services); Monthly costs for operating and maintain website: $755. Answer the following question to demonstrate an understanding of Return On Investment (ROI) and how it applies to the sale you are trying to make: Based upon the available financial data, what is the ROI ND s direct mail campaign? Based upon the available financial data, what is the ROI ND s direct mail campaign? b.482.5 percent c.5.82 percent d. 582.5 percent a. 4.82 percent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Consolidation In The European Financial Industry

Authors: R. Bottiglia, E. Gualandri , G. Mazzocco

1st Edition

0230233228,0230275028

More Books

Students also viewed these Finance questions