Question
The following case study pertains to all the questions. A company is marketing a new product. They want to create a new campaign to maximize
The following case study pertains to all the questions.
A company is marketing a new product. They want to create a new campaign to maximize the profit from mailing to their prospects. Here are the facts:
- They have 100,000 people on their list.
- The response rate to previous campaigns has been 1%.
- The all-in cost of each mailing is $5.
- The gross profit from each sale is $250.
- Based on test data results, the company constructed a lift curve (shown as a table below):
1. If the company sends a mailing only to the top 10% of the list, the expected number of responders is:__________?
2.If the company sends a mailing only to the top 10% of the list, the total cost of mailing is given by the expression: 10% * 100,000 * $5?
3. In the top 30% of the list, the expected number of responders is given by the expression: 90% * 100,000.?
4. If the company targets the top 20% to send a mailing to, the expected gross revenue is given by the following expression:__________?
5. If the company targets the top 20% to send a mailing to, the total cost of mailing is given by the following expression:__________?
6. If the company mails to 20% of its list at random, the expected profit is given by the following expression:__________?
List Penetration Responders 10% 50% 20% 80% 30% 90% 40% 100% 50% 100% 60% 100% 70% 100% 80% 100% 90% 100% 100% 100%Step by Step Solution
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