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e-Business Model and Strategy Business
Group 11 BEN MOHAMED Salim HUMBLET Michael OLIVEIRA Pedro OTERO TORRES Pablo PEREZ CARPIO Borja RADZKI Przemyslaw Pavel RIFAYI Melaz VERSTRAETEN Eloy VULFS Raphael
Academic year 2010/2011
That way the costumers promote indirectly the website of Groupon. c) Cultural functionalities On the website of Groupon. all buyers who have emerged get the product. Consequently. Inc. saving realised on the product and the minimum number of products which has to be purchased so that that deal could be concluded. if the minimum is not reached. In order to get the product they want to purchase. The success of Groupon. there are 200 sites similar to Groupon some copying the look of its site. any coping. A major drawback of the website is the fact that it is easy to imitate. the buyers also can get acquainted with the method of payment. The offer is posted on the website of Groupon and is send by e-mail to all the members who have registered on this site. transmitting. The costumers can also follow the group on the various websites of social networks such as Twitter and Facebook. festivals and music concerts. theatres. we will not find any links to other similar companies. The information about theses events are naturally available on the website. In North America. Key Functionalities a) Communication functionalities On the website of Groupon. the costumers send the offer to their friends. The offer shows a product with a discount from 50 to 90%. or used with express permission of the copyright and/or trademark owner. operas. Inc. posting. deep linking. This password is encrypted. To buy something on the website a certain number of people has to sign up for the offer which is presented on the website. its regular price. Personally Identifiable Information on the customers resides on a secure server that only selected 2 . d) Copyright functionalities Everything located on the website is the exclusive property of Groupon. In addition. is directly associated with its business. trademark or other intellectual property right infringement that would expose the User to civil and/or criminal penalties. or otherwise modifying of the site without the express written permission of Groupon. linking. is strictly prohibited. On the website. e) Security functionalities Groupon takes security seriously and take numerous precautions to protect the security of Personally Identifiable Information. b) Commercial functionalities Groupon displays an offer of products a day in each market it serves. The customers can access their Personally Identifiable Information on the Website through a password and their email address. the price after the discount. Any violation of this policy may lead to a copyright. If the minimum number of purchases is reached. the costumers can find and buy all kind of tickets which give them access to different cinemas. distributing. They can pay with their credit cards and security is guaranteed. concerning its communication. The offer states: a detailed description of the product which is offered. font and logo. the discount offered by the supplier.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 1. That’s why the company doesn’t want to promote others websites. no one gets the product.
consequently. GiltCity. Over 50M total subscribers across over 300 cities in more than 40 countries. Groupon enters new markets by looking for the local market and identifying successful local businesses. Yelp. Woot!.com. Number of unique visitors per month Nearly 11.scribd. ideeli. 2. Cheaptoday. Facebook Deals. Groupon’s business key success has been its strong partnership that it creates with local businesses. 3. in Sharepost. estimated $920M in revenue in 2011. Kupikupon. Number of subscribers Number of active users Competitors LivingSocial. Nextup Research Report.2M in 2010. Groupon sales personnel then approach local businesses and try to establish partnership with the local business. Coupons. Estimated 11. The key business characteristics Revenue Over $ 600M in 2010.2M unique visitors a month in the US in 2010. They encrypt certain sensitive information (such as credit card information) using Secure Socket Layer (SSL) technology to ensure that Personally Identifiable Information is safe.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 personnel and contractors have access to. Estimated 60% of Local Deals Market.com/doc/48117058/Sharespost-Groupon-Research-Report (page viewed the 20th of March 2011) 1 3 . NEXTUP. adresse URL: http://www. The target group1 Groupon offers a « Deal of the Day » in each of the 300 local markets. Groupon offers considerable savings to consumers (up to 70%) who can then discover services/product they didn’t know. Market shares Support team More than 3100 employees. Google offers. it guarantees revenue and large number of new customers for local businesses.
4. Groupon is also best suited for businesses thriving on repeat customers such as spas and restaurants. There are about 500 firms worldwide (200 firms in US alone) which have started to emulate Groupon’s success. When a minimum number of users subscribe to the deal. Business model Groupon’s business model is easy to copy. Source: Company Reports & Primitus 4 . and establish partnership with the local business.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 Groupon is best suited for high fixed cost businesses and business where the customer acquisition cost is very high. Groupon performs research of the local market and identifies the successful local businesses. Groupon features deals involving products/services offered by local businesses in some selected locales based on the target consumer base. Groupon sales personnel approach local businesses with outstanding reviews. Consumers then redeem coupons with local businesses and receive discounts. barriers to entry for the local deal market and switching costs for consumers and local businesses are low. The deal is generally available for a few days and the deal becomes inactive if the critical subscription is not reached. Consumers can also see deals in the Groupon website. Consumers subscribe with Groupon and receive deals through emails. the deal becomes active. Groupon pays the local businesses after taking a 40%-50% share of the revenue generated by the deal. Consumers pay Groupon by purchasing the deal.
b) Customer relationship Information strategy: The platform provides no information unless you gave your e-mail address: it's an aggressive recruiting strategy. ordinary people but also companies for example. In addition. Target customer: Originally Groupon had young women as main target. Indeed. In addition to that. Intellectual: brand name Value Propositions (Offer): Promotes products or services with significantly discounted prices Customer Relationships: Self-Service : customers has the liberty to choose the product or service that suits his needs Channels: Website. and the economic concept surrounding its creation. 5 . Groupon committed to providing a "good deal" by city and by day. Key Partners: The Point platform (even though now Groupon acts independently) Key Activities: Offers discounts on various products and services from other companies Key Resources: Physical: Internet. making unrealistic promises (false advertising). hence the offer more focused on health and beauty. Groupon’s reputation has grown rapidly. All types of products and services are thus sold by Groupon. advertising outside of the site is also aggressive. servers . The word Groupon is now a familiar name associated to “cuts” or “good deals”. Feel & Serve: Groupon run its activities and offers its services only through its website. Value proposition: The big advantage is that Groupon only makes promotional offers for which the price decreases from 50 to 90% overall.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 5. Indeed. the frequency of of the offers makes the site very attractive. However. Capabilities: The Groupon system has no limits: it does not need space to store goods and deals may be concluded with suppliers of all types of products and services. Thus its business model intends to reach as much people as possible. Trust & Loyalty: Given the deals offered by the site. mails to customers Customer Segments: Mass Market Cost Structure: Point-of-sale structure through the internet Revenues Streams: If enough customers enter into a deal 6. we just offer some key information. Groupon is a platform offering promotional geo located products and services. The four pillars of the business model a) Product innovation Groupon doesn’t distinguish itself from competitors by its products but rather by the manner with which it sells its products and services. Business model canvas The features of Groupon’s ebusiness canvas will be dealt with extensively in the following sections. Groupon has expanded its offer. Here.
the company uses social marketing sites such as Facebook and Twitter. Then. but also promotes through applications on iPhone and Android-based mobiles to promote the idea. Financials Revenue Model: Groupon earnings come by keeping approximately half the money the person pays for the coupon. Groupon has developed an e-commerce platform: Groupon Store. Besides. The revenues in 2010 were $600M and the estimated revenue in 2010 will achieve $920M. a commission of 30% (on deals promoted by Groupon) or 10% (on deals promoted by the merchants themselves) is charged by Groupon. the site has more than 50M total subscribers in more the 40 countries worldwide. Ownership of the resources Relationship Data Transaction • • • • • Groupon The businesses Groupon The businesses Groupon 6 . 7. The commissions depend on the discounted deal prices and the deal categories of the offers. Resources: The main resources of Groupon are its 3100 employees and the computers and the locals and its reputation. Profit Model: Since the system of commission represents the major part of the incomes of Groupon. Groupon can reach this objective by increasing the number of subscribers and the numbers of partnerships with small businesses by exploring new markets such as China. Their promotional texts contribute to the popularity of the site. A new offer can be started for free. the company has developed partnerships with several companies in order to provide a range of services to the merchants who choose to advertise Groupon Deals such as “TransNational” (payment processing) and “Speakeasy” (voice and data communications). when a deal is reached. Nowadays. the company’s growth depends essentially on the number of deals. Partner network: The number of subscribers has continuously increased since the creation of the website.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 c) Infrastructure Management Activity configuration: Groupon firstly sends employees to research the local market and find a business with outstanding reviews. Cost structure: The costs consist mainly in the exploration of business with outstanding reviews and the promotional costs. Nevertheless. In 2009.
or not. The supplementors are the competitors that are copying on Groupon’s business model and developing the same business. the supplier and Groupon agree on a win-win deal where the price will be lowered according to a minimum quantity sold. 2 Website: www. The company Groupon takes 50% of the final price and the customer is delivered through the supplier if necessary. the groupon and the deal goes through if the minimum has been sold at the end time. Groupon couldn’t live without other partners and allies that are the merchants contracting with them and the subscribers being the customers. The partners and the allies The first Partner Groupon needed was the platform The Point from where it expanded. money The businesses data about products. Daily subscribers will buy.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 8. In this way. the companies contracting with Groupon are the first complementors and the ones being in contact with the clients. special discounts Customers money. but only once a "tipping point" of people agree to participate. Together. products and value streams Goupon Groupon vouchers. services and prices Customers Businesses products and services Customers vouchers’ Businesses 9.”2 Secondly.groupon. “It’s a website that lets you start a campaign asking people to do something as a group.com 7 . personal data’s Groupon data about the customers. Diagram of the information.
new businesses products that need to be known. distributing the final price equally between the company Groupon and the product supplier. the contracted deal is only executed if the minimum quantity is met. That way. b) The added value of the online business The added value that is brought by the company is mostly the security.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 10. discounts and packages. the products sold are not basis products where the margin is low. Therefore. the supplier is able to calculate a potential benefit out of the deal. but rather luxury products. Overview of Groupon’s e-Business strategy a) Value proposition Groupon promises to lower market product prices from 50 to 90%. Indeed. c) Market segments The following graphs offer statistics regarding the subscribers: they are mostly young single women that are educated and work for good revenues. 8 .
On the other hand. buying through Internet is a new way to make his shopping. The delivery is executed by and in charge of the supplier. f) Resources. Groupon started its business thanks to the platform The Point as launcher of websites that allow 9 . Simultaneously. technology. e) Activities to perform Groupon needs to reach its subscribers and attract new ones in order to raise a minimum amount of customers interested in the same product. Indeed. Groupon is looking for companies that are willing to be known and to expand or the ones willing to develop internationally. but moreover.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 On the other side. d) Channels On the first hand.. etc. the channels used to reach the clients are characterized by both a substitution effect and an extension effect. it needs to perform well in order to have recognition and respect from contracting companies and attract new ones. the businesses are contacting Groupon to work with the company and are helped to clinch a deal. the Groupon offers allow discounts and less travelling.
many companies are using the Groupon model to launch a business. Moreover. Lots of other companies have also worked with Groupon and most of them are quite satisfied with the services of Groupon even though there are more and more studies that nuance this affirmation3. g) Partners The partners. S. in Harvard Business School. Cost structure EDELMAN. Groop Swoop. Groupon is the largest player in the emerging local deals market with more than 60% of the shares. Coupons. i) Revenue sources From the price charged to the subscribers for the voucher. BuyWithMe and Yelp.pdf (viewed the 3rd of April 2011) 4 Deatsch. BuyWithMe. February 2011. j) Pricing strategy Groupon has as strategy. 11. half of it is returned to the company Groupon. & JAFFE. it is now independent.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 gathering people searching for the same project or product. We note that there is a significant competition from LivingSocial that has raised funds and is likely to expand. 3 10 .”4 k) Conclusion In order to conclude. in order to dismiss the rivals.hbs. The company has more than 50 million subscribers spread in 300 cities worldwide.com. However Groupon was a side project of The Point at the beginning. S. adresse URL: http://www. h) Competitor The business model of the company Groupon is a weak point for the company since it can be easily copied. Therefore. the heaviest competitor is LivingSocial followed by Coupons. TownHog. The other players are LivingSocial. To Groupon or Not to Groupon: The Profitability of Deep Discounts.. Among them. Groupon has created the “Groupon Merchant Partner program that guarantees businesses a certain number of voucher slots per year if they agree not to work with Groupon competitors. & DUKE KOMINERS. Groupon launches features to keep merchants happy and away from rivals. Yelp.. to reduce the market price at least by half in order to attract the customers on the different groupons.edu/research/pdf/11-063. and eWinWin. Jasmere. being essentially the companies co-contracting. Ideeli. are very diversified going from the cloths brand GAP to the events NHL and NBA and the digital payment platform MASTERCARD. B. Interenter Retailer. 2010. Ideeli. K.
As a store owner – if I choose to use Groupon. high marginal profit levels. You can imagine that the margins on cupcakes are very high. but I think it is instructive to disaggregate that market a little bit and see just who is using Groupon. my net is 25% of the retail price. If you take a look at the revenues of typical local advertisers it consists of car dealers. The issue with these costs are that you have to know very well what the lifetime value of the customer is in order to price these properly. Businesses willing to spend money to acquire users. I am offering a 50% discount generally – and Groupon is taking 50% of the offer price – so in essence. who can afford to offer 75% off on a regular basis? The answer falls into two buckets: 1. Car dealers are in no position to use Groupon – nor are clothing stores. Say you own a spa. $200M in SGA and perhaps another $50M in miscellaneous costs (real estate – exec salaries. etc… What you realize looking at the list is that most of these businesses operate in extremely competitive environments with margins that are razor thin at best. In most media businesses this is called SAC (subscriber acquisition costs) or CPGA (cost per gross add).ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 Groupon has about $1B in revenue. retail stores. perishable inventory and incremental capacity. supermarkets. My guess is that Groupon is doing $1B in revenue – $500M in Cost of Good Sold. chain restaurants. there is thus not a mass of cutting-edge technology required nor tremendous database necessities or server needs – one can assume that the cost structure is not going to get too far beyond the SGA line. 11 . Perhaps. 2. Since most of the Groupon employees are either sellers or administrative people doing the “paper work” for the deals. So Google offers $6B for $250M in EBITDA – 24X which seems like a large number – but if EBITDA is scalable and growing extremely fast (over 100% per year right now) – then the 24X becomes 12X in a year and 6X in 2 years – which seems like a pretty good deal for Google – and is probably one of the reasons why Groupon decided to remain private. The overhead is completely fixed and you are paying the workers to be there – so incremental margins are high. Companies with extremely fixed costs. bars and grills. supermarkets etc… The margins for these businesses are too low – and they already spend a lot of marketing dollars branding themselves. electronics chains. Now in order to reach that conclusion. the cost of ramping up ahead of revenue etc…) – for a total of $250M in EBITDA. Companies looking to lose money in order to convert customers into regular paying customers. It has been written that Groupon has cracked the local problem – and that all of the $100B per year or more that is spent locally is open to them. you also have to believe that Groupon will continue to take an increasing share of the local advertising market – particularly the promotional budgets and marketing budgets of the local advertisers. electronics chains. Now their business model is based on simplicity. Now let’s look at the local advertising market. If you look at a typical media company at scale – they tend to run about 20% of sales as costs (incremental margins on the extra $ of revenue is over 80% often) – so on $1B of revenue you have $200M of costs. They pay out 50% of that to their partners who offer the discounts – and the remainder of the company cost is in sales. The question is.
the abnormal profit rate will fall towards zero. Google prepares a new product to help potential customers find big deals in the area where they live. this principle does apply even though in a slightly different way. which eventually will decrease profitability for all firms in the industry. If they partner with Groupon. what if a promotion does not provide any significant benefit? A good example is businesses teaming up with popular coupon sites like Groupon or Living Social to drive store traffic via discount coupons. It offers the deal of the day. In the online world. Sale price of Promoted Product: $8 ($16 Sunday brunch on sale for $8 through Groupon) Product costs: • • • • • • • • Raw Materials Labor Packaging Promotional expenses Insurance Rent Utilities Delivery One way of pricing this is to take all the costs into consideration and apportion them to the overall sales of the promoted product within the portfolio. The competitive strategy should be based on a strong understanding of the industry structure and how it may possibly change. Entry of larger players such as Facebook (Facebook Deals) and Google (Google Offers) could also pose significant competition to Groupon in the future. the deal would have to be priced at $8. sending a daily email". Here’s what a business should consider before going with Groupon: Let’s assume that the business in question – a restaurant – offers a Sunday brunch for $16. Unless the entry of new firms can be blocked by incumbents. The threat of the entry of new competitors Profitable markets that yield high returns will attract new firms. Michael Porter’s five forces model Michael Porter’s 5 competitive forces model is the basis of modern business strategy. you have to allocate the costs of all the above to determine profitability. if the product is a buffet lunch. Groupon and LivingSocial. So. It goes without saying that a business engages in promotions if it provides some significant long-term benefit. Google Offers follows the same mechanics that the two main representatives of the segment.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 The Cost (Loss-making) Mechanics of Groupon Promotions cost money. This results in many new entrants. 12. This model is based on the principle that a corporate strategy should take into account the opportunities and threats in the external environment that the organization operates in. But. and if it meets the number of 12 .
Groupon is the largest player in the emerging local deals market. Google tried to buy Groupon by $ 6 billion to strengthen its local advertising business. Worldwide.4B in 2009. dwarfing the other players. Groupon faces competition from LivingSocial which is rapidly expanding to all cities in which Groupon is offering deals. Yelp: Launched in October 2004 by former employees of PayPal. it is specific and can enjoy the discount. Coupons. there are over 500 similar sites including over 200 in US. which has started offering deals. Users can save money by using options such as printable coupons.6B in 2010 up from $22. Save to card offers and local coupons. form groups.com is the largest printable coupon Website on the Internet. LivingSocial's social applications enable more than 85M users to catalog. LivingSocial offers deals in more than 127 markets and four countries. arrange and conduct events. in December 2010 LivingSocial has been the most serious competitor. LivingSocial: Founded in 2007. LivingSocial is a social discovery and cataloging network that connects users with their interests. Yelp also offers its users social networking features such as the ability for users to add friends. an even bigger player than Groupon. The company has more than over 50M total subscribers and offers deals in more than 300 cities worldwide. providing clients with a solution to coupon based promotions and consumer services. with more than 60% share. Coupons is a leader in interactive coupon solutions. LivingSocial is a strong number two in the local deals market after Groupon. Coupon Codes are available for diverse product categories. the intensity of competitive rivalry is the major determinant of the competitiveness of the industry. The intensity of competitive rivalry For most industries.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 people who accepted the offer. Groupon rejected the offer and is instead preparing to launch an IPO (Initial Public Offering) worth $ 15 billion. Groupon could also face competition from players in the local review & search space such as Yelp. and in some regional markets. The threat of substitute products or services 13 . The Company's marketing technology solutions have helped top brands and retailers reach consumers on thousands of Web sites with alternatives to offline-delivered coupons. Yelp is a local review website where users can write and read reviews on various categories. Moreover. Coupons: Founded in 1998. in our estimate. share and buy their favorite items. participate in discussion forums. We estimate that the US Online spending (on which local deals market is dependent) is likely to edge up to $23. review.
It is also a highly diversified market and there are no labor unions between suppliers making this group less powerful at negotiating time. so they are less sensible to the price changes. The latest initiative related by the webs sites in the U.. Finally Groupon only sells his products (offers) when a fixed number of customers is going to buy it. Moreover. This is not the case with Groupon. The bargaining power of suppliers. The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure. and services (such as expertise) to the firm can be a source of power over the firm. e. There exist in the global market many competitors that develop offers so similar to Groupon products. 14 . or.S. Groupon´s provider market is formed by a huge amount of companies that work in different markets. The companies wishing to participate in these promotions will have to answer "The Green Story” criterion. because there are millions of Groupon customers in the world that only buy a small quantity of offers. it means that Groupon can remove the offers if there is not the minimum number of buyers. the products bought by customers are not an important part of their expenditures. LivingSocial. Suppliers of raw materials. that want to make Corporate Social Responsibility. As a conclusion it is clear that Groupon customers don’t have a big negotiation power. Yelp…and many others). as it is mentioned in the last paragraph (Coupon. components.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 The existence of products outside of realm of the common product boundaries increases the propensity of customers to switch to alternatives. we can conclude that Groupon´s suppliers are not a powerful group as customers are. Also we can mention that the buyers groups are not concentrated. this feature facilitates the search for substitute to Groupon and supplier switch. From the fact that Groupon´s providers can be changed anytime. We can say that a group of customers is powerful when it buys a large volume of products. which also affects the customer's sensitivity to price changes.g. Green Box Top was born in August 2010 and it allocates part of the profits made by selling the coupons or offers a social cause. In this case. products…ets) and is much less concentrated than the industry it sells. may charge excessively high prices for unique resources. Suppliers may refuse to work with the firm. Groupon suppliers market is dominated by numerous companies (services. The bargaining power of suppliers is also described as the market of inputs. This proposal called Green Box Top. when there are few substitutes. labor.
2011 EDELMAN. 'Daily deals' sites turn discounts into a social media phenomenon. 2010 NEXTUP. B. September 16..com/developers/single/groupon/8878/c http://www. Videos CBS News. 2010 The Wall Street Journal.crunchbase. Meet the Fastest Growing Company Ever. To Groupon or Not to Groupon: The Profitability of Deep Discounts. 2010 The Wall Street Journal. Interenter Retailer. Groupon launches features to keep merchants happy and away from rivals. Surprising Ways to Save Money. 2010 CNN. 2010 The economist. Los Angels Times. Aug 20. August 16. . 2010 Webography http://en. January 2.groupon. Groupon: Fastest Growing Company Ever?. S. 2010 Deatsch. 2010 CNBC. Detailed bibliography Articles Forbes Magazine.linkedin. 2010. Groupon And The Clone Wars.businessinsider. August 19.org/wiki/Groupon http://www. February 2011.com/ http://www. On Groupon and its founder.allfacebook. October 22. Groupon Goes National With Gap Deal. December 17.com/blackboard/groupon Statistics http://statistics.com/company/groupon http://www. Andrew Mason. Groupon Moves Into TV Land. & JAFFE.com/learn http://www. Nextup Research Report. Does Deals With Top Chefs. August 4.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 13. S.grouponworks. in Harvard Business School.wikipedia.. Man tries living on coupons for a year. October 26. Of bits and bites. K. August 12. 2010 Chicago Magazine. August 2010 Inc. August 30. & DUKE KOMINERS.com/company/groupon/statistics 15 .
etc) What other financial impact will the promotion have on your brand .00 $5.00 $18.00% $20. Appendix APPENDIX A: Example of the ROI and profits on the operations of Groupon Description What is the face value of the certificate? How much will someone spend to buy the certificate? What % of paid money will GroupOn get? What is your normal margin? If a $30 purchase costs you $10.00% $20. you have a 200% margin ($30$10)/$10 Factor Offer Amount (O) Sell Amount (S) GroupOn's Cut (G) Value $20.00 Income from Investment Initial Offer Income Income from sells beyond Certificate Offer Amount New Patron Long Time Income Brand Benefit Income $24.616.568.00% 1.225 What is the average amount a customer spends on a purchase using the certificate? Certificate Average Ticket (A) What % of the certificates do you expect to be redeemed? How many certificates do you expect to sell? How many new.076.positively or negatively? Redeemed Ticket % (R) Total Sold (T) New Patron % (N) New Patron Long Time Income (L) Brand Value (V) RESULTS 75.00 $0.00 $10.00 68.883.67 $5.00 50.52 Total Long Term Profit ROI $13.00% Margin (M) 230.500.00 $6.00 16 .125.33 130.048.375. expressed as a % of total certificates sold? How much will a typical customer spend with you over their lifetime (or year/month.77% CALCULATION BREAKDOWN (FYI) Cost of Investment COGS COGS for ticket beyond certificate amount COGS lifelong purchase cost Brand Damage Cost $10.ICHEC Jean-Dominique Seroen eBusiness assignment 2 3rd of April 2010 Group 11 14. recurrning customers do you expect to attract from the campaign.00 Profit from purchases w/ certificate Long term Profits (includes growth of customer base.00 $0.00 $0.18 $0. revenue effects tied to brand value and purchases with certificate) ROI over the "Long Time" Period Campaign Profit $1.48 $0.
ICHEC Jean-Dominique Seroen APPENDIX B: Company Timeline eBusiness assignment 2 3rd of April 2010 Group 11 17 .
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