owns a luxury resort located on the island of Bora Bora, a 12 square-mle island
ID: 2816235 • Letter: O
Question
owns a luxury resort located on the island of Bora Bora, a 12 square-mle island in the western part of the Society Islands of French Polynesia The resort is a major international tourist destination, famous for its aqua-centric luxury hospitality, and plentiful coconut trees. Veronica was interested irn determining the profit that her marketing campaigns are generating for her business so she contacted a consulting firm in Los Angeles, CA, to help her. As a marketing graduate, you are selected to perform this task You pack your bags and flew to Bora Bora Upon meeting with Veronica, you suggest that she might want to use Return on Marketing Investment (ROMI) to find out how much profit each marketing campaign is generating. ROMI is a metric used in marketing to measure the productivity of a promotional campaign. It is a subcategory of return on investment, as the expenses here are incutred on marketing You also comment that by focusing on ROMI Veronica can help her shareholders move away from the idea that marketing is an expense that can be deducted when the economy is weak Instead, it is an investment that produces revenue n order to calculate ROMI, you ask Veronica to supply you with several figures, including the revenues before each revenues after each campaign, and marketing campaign costs for television, social media and website (see below) You espiain h revenues after campaign minus revenues before campaign would equat sales growth Then, the increase in sales would be ed in ormula below to obtain ROM ROMI (Increose in Sales-Marketing Compaign Cost) / Marketing Compeign Cost The Sgures rom Veranica show that revenue before each campaign was $12000 The cost of ech cenpaign and subgueExplanation / Answer
Answer 1: increase in sales
Television = $4000
Social media = $18000
Website = $6000
Answer 2: ROMI
Television = 33.33%
Social media = 50%
Website = 20%
Answer 3: Net ROMI
Televison = 27.33%
Social media = 44%
Website = 14%
Answer 4: Based on ROMI, Social media is the most profitable marketing campaign
1 2 3 4 Television Socia Media Website Revenues before campaign 12000 12000 12000 Revenues after campaign 16000 30000 18000 Increase in sales 16000 - 12000 = 4000 30000 - 12000 = 18000 18000 - 12000 = 6000 Campaign cost 3000 12000 5000 ROMI (4000 - 3000)/3000 = 33.33% (18000 - 12000)/12000 = 50% (6000 - 5000)/5000 = 20% Normal sales growth rate (given) 6% 6% 6% Net ROMI 33.33 - 6 =27.33% 50 - 6= 44% 20 - 60 = 14%Related Questions
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