Explain how advertising can be used to generate buzz

Assignment Help Marketing Management

Reference no: EM13222621

1. The Tropical Paradise Resort is located on the coast of an exotic Pacific island. Room rates are $300 per night, which includes free access to the pool, gym, and tennis courts. The resort also offers the following services:

Aerobics classes ($5 per)
Therapeutic massages ($40 per)
Scuba-diving trip to a nearby coral reef ($60 per)
Day trips to an island volcano ($100 per trip)

The average stay is five days. The hotel is considering two pricing options:

1. Charge the regular room rate and charge separately for the four services above

2. Charge a higher room rate, which includes the services

The resort's objective is to maximize long-term profits by attracting repeat and new customers. Should they price their services separately or bundle them? Why? Besides prices, what other factors are important in your decision?

2. Buzz can be created in a variety of ways, for example, advertising. Explain how advertising can be used to generate buzz. What are some of the dangers of this method?

3. Gobi Inc. has sales of $40,000,000. The contribution margin is 40% and the fixed costs are $3,000,000. The variable cost per unit is $12. The company is considering two different strategies for increasing their profits:

1. Spend $2,000,000 in advertising; the results is expected to increase the company's sales by 25%

2. Reduce the price by 20%; the price-demand elasticity is -3.0

Which of the two strategies will generate the highest overall profits?

Reference no: EM13222621

Questions Cloud

What is the main concern of the job characteristics model : What is the main concern of the job characteristics model?

Why do companies use job specialization : Why do companies use job specialization? How can specialized jobs be modified to eliminate the boredom and low job satisfaction associated with them?

Explain the standard gibbs-free energy of a system : The standard Gibbs-free energy of a system is related to its equilibrium constant through the following equation.

What is the relationship between responsibility, authority : When delegating work, what is the relationship between responsibility, authority, and accountability?

Explain how advertising can be used to generate buzz : The Tropical Paradise Resort is located on the coast of an exotic Pacific island. Room rates are $300 per night, which includes free access to the pool, gym, and tennis courts.

How do managers generally describe organizational authority : How do managers generally describe organizational authority?

What five methods have traditionally been used : What five methods have traditionally been used to departmentalize work and workers? Give one advantage and one disadvantage of each.

Explain what is the maximum quantity of nac2h3o2 : What is the maximum quantity of NaC2H3O2 that can be added to 200.0 mL of this solution before precipitation of begins?

Compare an organizational structure and an organizational : Compare an organizational structure and an organizational process.

User Account

All Pages