Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Two airlines, AERO and OAirlines, compete for a market of 10 million customers. The company AERO intends to launch a campaign to promote its
Two airlines, AERO and OAirlines, compete for a market of 10 million customers. The company AERO intends to launch a campaign to promote its SKY FREE frequent KM card, to strengthen the loyalty of its current customers and hoping to recover market. Each loyal passenger earns an average of 1,000 pesos per month. The current state of consumer behavior is given by the following matrix: LIKELIHOOD OF CUSTOMER LOYALTY AERO OAirlines AERO 0.5 0.3 OAirlines 0.5 0.7 After the promotion campaign the following situation is expected: LIKELIHOOD OF CUSTOMER LOYALTY AERO AERO 0.7 OAirlines ? OAirlines 0.3 ? If the cost of the promotional campaign will be 100 million pesos per year, assuming investment and immediate effect, determine the values ? In such a way to obtain a profitability of 200 Million (that is, increase sales by 300 Million, compared to before starting the campaign) Thank you :)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started