What was the return on marketing expenditures

Reference no: EM131955662

Question: A catalog retailer is preparing to release a new catalog. they initially tested the response to the catalog in a subset of their customers. in the initial test, they reached out to 30,000 customers and sent them a copy of the catalog, which costs $.55. 970 customers made a purchase, spending an average of $75. The retailer's margin is 40%( variable costs are 60%)

a. What is the gross profit in dollars of this test mailing?

b. What is the gross profit % of gross sales?

c. What was the return on Marketing Expenditures (gross profit as a function of marketing costs?)

d. What was the breakeven for this capaign?

e. The marketer now engages in RFM analyses. They identify the RFM cell 452 had a response rate of 3.10%. What is the breakeven index for that group?

Reference no: EM131955662

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