Create an appropriately-labelled whale curve

Assignment Help Marketing Management

Reference no: EM131035749

Marcel's Manufacturing has assembled the following information about its customer base:

Customer	Revenue	Var. Costs	Fixed Costs	Net Revenue
1	$2,579,856	$2,941,036	$130,154	($491,333)
2	548,868	$472,026	$27,690	$49,151
3	4,568,218	3,791,621	230,466	546,131
4	658,279	579,286	33,210	45,783
5	4,865,882	3,454,776	245,484	1,165,622
6	813,224	561,125	41,027	211,072
7	9,135,872	7,491,415	460,904	1,183,553
8	597,254	465,858	30,131	101,264
9	851,336	740,662	42,950	67,724
10	244,568	247,014	12,338	(14,784)
11	1,289,657	1,444,416	65,063	($219,822)
12	681,278	517,771	34,370	129,136
16	792,856	539,142	40,000	213,714
13	792,856	2,579,670	123,947	(246,788)
14	3,892,868	3,270,009	196,395	426,464
15	1,687,581	1,113,803	85,138	488,639
17	716,892	580,683	36,167	100,042
18	1,879,542	1,935,928	94,823	(151,209)
19	899,799	629,859	45,395	224,545
20	482,582	376,414	24,346	81,822
Total	$39,643,241	$33,732,515	$2,000,000	$3,910,726

Marcel's annual fixed costs consist of marketing expenses of $300,000 and administration costs of $1,700,000. These are allocated to each customer based on relative revenue [e.g., customer 1 fixed costs = $2M x ($2,579,856/39,643,241) = $130,154 (rounded)]. The general manager has suggested that customers 1, 10, 11, 13, and 18 be dropped, as they are not generating net revenue. You are uneasy with this decision.

Required:

a. What would you recommend to the general manager? Show your calculations.

b. Create an appropriately-labelled whale curve?.

Reference no: EM131035749

Questions Cloud

Perceived-value pricing-value pricing-going-rate pricing : Consider the product/service you are developing for your course project and the information in your readings on pricing. Choose one or more of the six price-setting methods your textbook discusses (markup pricing, target-return pricing, perceived-val..

Defined marketing : We defined marketing as, “the art and science of getting people to spend their money on your product rather than the other guy’s, and be happy that they did so.” Do you think that’s true? Does some Wizard of Oz person-behind-the-curtain get you to bu..

Hedging is a method of risk mitigation : Risk mitigation is important as companies expand their supply chain into emerging, lower cost markets. Global companies are increasing their focus on risk management. Any contract won, new order received or new business opportunity includes an elemen..

The deductibility of interest and dividends : How does the deductibility of interest and dividends by the paying corporation affect the choice of financing (that is, the use of debt versus equity)?

Create an appropriately-labelled whale curve : Marcel's annual fixed costs consist of marketing expenses of $300,000 and administration costs of $1,700,000. Create an appropriately-labelled whale curve?

Determine the largest angle ? so that the cord : The cylinder at E has a mass of 10 kg, and the coefficient of static friction between the cord and the peg is µs =01

What are some common hedging techniques : What are some common hedging techniques (inventory, commodity, materials, freight, etc.) that can be used in value chain management? Which technique would be utilized to ensure against an increase in materials cost, and what are the tradeoffs? How mi..

What effect does compounding interest more frequently : What effect does compounding interest more frequently than annually have on (a) the future value, and (b) the effective annual rate (EAR)? Explain. How would you explain the difference between the annual percentage rate (APR) and effective annual rat..

Tension between acquiring power and using power : Caro notes the tension between acquiring power and using power (and uses Johnson's shift to illustrate the point). Thinking about the five types of power: legitimate, reward, coercive, expert and referent…which one(s) do you think would be used more ..

User Account

All Pages