Customer Preferences and the Bundling Strategy
Notes for Writer: Hello again this is the follow up question for the other question you just completed that was also Customer Preferences, for this Problem there is a different question but the data on the chart is still the same. Maybe you can use the data from Part 1 if you need it to answer for Question 1 down below. Please use Microsoft word thank you.
Scenario:
You operate a Caribbean destination resort. You currently offer plans for a cruise departing from the resort and plans for a casino stay. It is expected that in 2021 there will be some return to more normal travel. You will re-launch your advertising for 2021 announcing that customers will be able to do both for one price. Your marginal cost per customer is $4800.
Customer Preferences:
Cruise Casino
Customer 1 $7,000 $3,000
Customer 2 $2,000 $6,000
Question 1:
You have estimated that 33% of your customers will never bundle. Specifically, you know that about 21% of your customers decline cruises because of seasickness. You also know that at least 12% of your customers decline the casino trip saying they don't believe in gambling. Given the preferences distribution, will the mixed bundling increase profits? You must show the calculations that support your conclusion.
Cruise
Casino
Customer 1
$7,000
$3,000
Customer 2
$2,000
$6,000
Question 1:
You have estimated that 33% of your customers will never bundle. Specifically, you know that about 21% of your customers decline cruises because of seasickness. You also know that at least 12% of your customers decline the casino trip saying they don't believe in gambling. Given the preferences distribution, will the mixed bu...
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