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The CEO and board of directors of a bike rental company named Urban AdvenTours, which is based in Boston, have decided to expand their market
The CEO and board of directors of a bike rental company named Urban AdvenTours, which is based in Boston, have decided to expand their market to Europe. In the pilot phase, they have decided to start with either Amsterdam or Paris. They have conducted some preliminary analysis to determine which city to focus on first. Using the following information help them make an informed decision:
Number of potential customers: Amsterdam: Paris:
Acquisition cost per customer on average: Amsterdam: $ Paris: $
Annual profit each customer generates on average: Amsterdam: $ Paris: $
Churn rate in both cities:
Also, it is determined that $ in is equivalent to $ in in both the Netherlands and
France.
Based on the information above, calculate the total customer lifetime value for each of the two segments. Based on your results, which segmentcity should Urban AdvenTours select for the first phase of the market expansion? Present the calculations and results.
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