Question
Without Promotion Price Change Promotion 1Loyalty Program Promotion 2$5 Thursdays Promotion 3Advertising Initial Value: Price Change Initial Value: Promotion 1Loyalty Program Initial Value: Promotion 2$5
Without Promotion | Price Change | Promotion 1Loyalty Program | Promotion 2$5 Thursdays | Promotion 3Advertising | Initial Value: Price Change | Initial Value: Promotion 1Loyalty Program | Initial Value: Promotion 2$5 Thursdays | Initial Value: Promotion 3Advertising | |
Peak time ticket price | $13 | $13 | $13 | $13 | $12 | $13 | $13 | $13 | |
Off peak time ticket price | $8 | $8 | $8 | $8 | $7 | $8 | $8 | $8 | |
Promotional ticket price | $5 | ||||||||
Peak show times per week | 14 | 14 | 14 | 14 | 14 | 14 | 12 | 14 | |
Off peak show times per week | 21 | 21 | 21 | 21 | 21 | 21 | 18 | 21 | |
Promotional price showings | 5 | ||||||||
Number of theater seats | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 |
Percent of peak tickets sold per week | 60% | 66% | 72% | 60% | 63% | ||||
Percent of off peak tickets sold per week | 40% | 44% | 48% | 40% | 50% | ||||
Percent of promotional tickets sold per week | 70% | ||||||||
Revenue per screen | $35,280 | $35,112 | $42,336 | $33,740 | $39,732 | ||||
Cost of promotion | $0 | $0 | $0 | $5,000 | $1,500 | $2,500 | |||
Ticket sales profit | $35,280 | $35,112 | $37,336 | $32,240 | $37,232 | ||||
Potential revenue lost from unsold tickets | $34,720 | $27,888 | $27,664 | $26,260 | $30,268 | ||||
Admissions per screen per week | 3,360 | 3,696 | 4,032 | 3,580 | 3,864 | ||||
Average ticket price | $11 | $10 | $11 | $9 | $10 | ||||
1. Based on the data provided in the marketing dashboard, which promotion should Syndey run?
(Click to select) No promotion should be run Promotion 1Loyalty program Promotion 2$5 Thursdays Price change Promotion 3Advertising
2. Focusing on the admissions per screen per week metric, how do the results of the loyalty program compare to the results of the price change tactic?
(Click to select) The loyalty program generated more incremental profit while the price change generated more incremental revenue. The loyalty program resulted in a lower average ticket price than the price change. The loyalty program increased ticket sales by 10% while the price change increased ticket sales by 20%. The loyalty program resulted in greater losses from unsold tickets than the price change did. The loyalty program increased ticket sales by 20% while the price change only increased ticket sales by 10%.
3. Sydney negotiates a better billboard location, which will increase ticket sales by 2 percent over her initial estimates. Also, a competitive loyalty program launches nearby which will likely suppress the results of Syndey's loyalty program by 2 percent. Given these new conditions, what strategy should Sydney pursue?
(Click to select) Promotion 1Loyalty program Price change Promotion 3Advertising Promotion 2$5 Thursdays No promotion should be run
4. Reset the estimates to their initial values. Sydney is debating whether she should cut her ticket prices to $10 for peak tickets and $5 for nonpeak tickets. She estimates that if she does so, she can expect to sell 70 percent of peak tickets and off-peak tickets. Should Sydney pursue this price reduction to keep her theater in business?
(Click to select) No, because the price cut reduces both her revenue and her profit from previous levels. Yes, because the price cut minimizes her potential revenues lost from unsold tickets. No, because customers do not react to the price change with increased demand. Yes, because there is $0 direct cost associated with the price cut. Yes, because the price cut maximizes her tickets sold.
5. Sydney focuses on the loyalty program to sell more tickets and earn more profits. To increase the program's effectiveness, Sydney decides to spend $2000 more to promote it. What percent of tickets must she sell to reach at least 5000 admissions per screen and what is the ticket sales profit at that level?
(Click to select) Percent of peak and off-peak tickets sold per week must reach 72% and ticket sales profit will be $45,400. Percent of peak and off-peak tickets sold per week must reach 71% and ticket sales profit will be $42,700. Percent of peak and off-peak tickets sold per week must reach 70% and ticket sales profit will be $42,000. Percent of peak and off-peak tickets sold per week must reach 71% and ticket sales profit will be $19,600. Percent of peak and off-peak tickets sold per week must reach 72% and ticket sales profit will be $43,400.
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