Problem 1. Given the extreme health risks, should marketers stop selling cigarettes even though they are legal and demanded by consumers? Should cigarette marketers continue to use marketing tactics that are restricted in one country in other countries where they are not restricted?
Problem 2. Explain the difference between share of customer and customer equity. Why are these concepts important to marketers?
Problem 3. Discuss any five (5) trends impacting marketing and the implications of these trends on how marketers deliver value to customers.
Problem 4. Select a retailer and calculate how much are you worth to that retailer if you continue to shop there for the rest of your life (your customer lifetime value)? What factors should you consider when deriving an estimate of your lifetime value to the retailer? How can the retailer increase your lifetime value? (These require your reflective Thinking; analytic Reasoning)
Hints: Students can select any store of their choice but they should consider factors such as marketing costs to attract and keep them as a customer, the length of time they are a customer, and the revenues they generate for the retailer. Calculating customer lifetime value can be very complicated. Intuitively, however, it can be a fairly simple net present value calculation. To determine a basic customer lifetime value, each stream of profit is discounted back to its present value (PV) and then summed. The basic equation for calculating net present value (NPV) is:
Where, Ct =-- t - Time of the cash flow N - total customer lifetime r- discount rate Cr - net cash flow (the profit) at time t (the initial cost of acquiring a customer would be a negative profit at time 0).