Reference no: EM132463964

Alicia is the owner-operator of Cool Beans, a local coffee shop. For the past year, Cool Beans sold 237,000 drinks at an average price of $3.30 per serving. Her average variable cost per serving was $1.36. Currently, she has been using local TV and newspapers to generate interest and awareness at a cost of $133,000 per year. She recently contacted Brushfire Social Media and they estimated they could reach the same number of people in her community with a social media budget at half the cost, though it would require an additional one-time investment of $13,000 in their website and social platforms.

• As an additional option, Brushfire suggested a separate promotional campaign that would offer a $1 discount to any person who likes their social media page. Brushfire estimates that Cool Beans would sell an additional 9,400 cups with this discount and this new campaign would cost $2,500.

Question 1: If it turned out that 30% of the coupon redemptions were used by people who would have purchased coffee at the usual price, what would be the Marketing ROI under these conditions?