Question
In: Operations Management
Please calculate the advertising budget for a start-up that expects annual $300,000 sales in the industry...
Please calculate the advertising budget for a start-up that expects annual $300,000 sales in the industry that dedicates on average 9 % of the revenues to promotion.
Given the projected conversion rate (% site visitors who makes a purchase) of 8% and average sale price of $500, how many sites visits do they need to achieve their sales goal?
Use conversion and The strategic objective is to acquire 60% of site visits from Facebook ads and 40% from Youtube (TrueView ads). Please re-calculate the advertising budget given the average cost per click (CPC) in your industry is $2 on Facebook and $5 on Youtube.
Solutions
Expert Solution
a. $27000
Advertising Budget = 9% of the revenue = 0.09*300000 = $27000
b. 7500
Expected No. of purchase= Expected Sale / Average Sale Price = 300000/500 = 600
Conversion rate = 8%
No. of site visits need to achieve = 600/0.08 = 7500
c. $24000
No. of visits from Facebook = % visit from Facebook * No. of site visits
No. of visits from YouTube= % visit from YouTube* No. of site visits
Advertising Budget allocation to Facebook = No. of visits from Facebook*CPC for Facebook = 4500*2 = $9000
Advertising Budget allocation to YouTube= No. of visits from Facebook*CPC for YouTube= 3000*5 = $ 15000
Total Advertising Budget = 9000 + 15000 = $24000
% of Revenue = Total Advertising Budget/Expected Sale = 24000 / 300000 = 0.08 = 8%
keosha answered 5 months agoRelated Solutions
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A ) An entrepreneur invests $40,454.00 into a start-up business
today. He expects the business will generate $60,003.00 per year
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Village industries expects total sales for Jan, Feb, and Mar to
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February: $
March: $
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April: $
The chart below lists the sales in thousands of dollars based on the advertising budget for...
The chart below lists the sales in thousands of dollars based on
the advertising budget for that quarter. The regression equation is
Y' = 4.073 + 0.8351X. What is the correlation
coefficient?
Advertising ($hunderds)
Sales ($thousands)
0
5
3
5.5
4
7
5
7.8
6
9
7
11
Multiple Choice
0.775
0.844
0.926
1.00
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COMPSYS is a start-up computer company. This year, the first year of operations, the company expects...
COMPSYS is a start-up computer company. This
year, the first year of operations, the company expects to reach a
Sales Revenue of $750,000. The company expects its sales to grow at
a rate of 15% per year. Its Cost of Goods Sold (COGS) is running at
34% of Sales Revenue, and is expected to remain at that rate. Its
Selling Costs are 12% of Sales in the first year and are expected
to increase by an additional 3% per year...
Calculate the NPV of a 20-year project with a cost of $300,000 and annual cash flows...
Calculate the NPV of a 20-year project with a cost of $300,000
and annual cash flows of $25,000 in years 1-10 and $50,000 in years
11-20. The company's required rate of return is 10%
4. Suppose that fixed cost for a firm in the automobile industry (start up costs of...
4. Suppose that fixed cost for a firm in the automobile
industry (start up costs of factories,
capital equipment, and so on) is $5 Billion and that the
variable cost is $17,000 for each automobile produced. Because more
firms increase competition in the market, the market price falls as
more firms enter an automobile industry, or specifically, P =
17,000 + (150/n), where n represent the number of firms in the
industry. Assume that the initial size of the automobile...
Consider the following sample data for the relationship between advertising budget and sales for Product A:...
Consider the following sample data for the relationship between
advertising budget and sales for Product A:
Observation
1
2
3
4
5
6
7
8
9
10
Advertising ($)
50,000
60,000
60,000
70,000
70,000
80,000
90,000
90,000
100,000
110,000
Sales ($)
299,001
371,000
364,000
430,000
440,000
485,000
535,000
546,000
595,000
675,000
What is the predicted sales quantity for an advertising
budget of $76,000?
Please round your answer to the nearest integer.
Consider the following sample data for the relationship between advertising budget and sales for Product A:...
Consider the following sample data for the relationship between
advertising budget and sales for Product A:
Observation
1
2
3
4
5
6
7
8
9
10
Advertising ($)
50,000
60,000
60,000
70,000
70,000
80,000
90,000
90,000
100,000
110,000
Sales ($)
299,001
371,000
364,000
430,000
440,000
485,000
535,000
546,000
595,000
675,000
What is the correlation value for the relationship
between advertising and sales?
Please round your answer to the nearest hundredth.
Consider the following sample data for the relationship between advertising budget and sales for Product A:...
Consider the following sample data for the relationship between
advertising budget and sales for Product A:
Observation
1
2
3
4
5
6
7
8
9
10
Advertising ($)
50,000
60,000
60,000
70,000
70,000
80,000
90,000
90,000
100,000
110,000
Sales ($)
299,001
371,000
364,000
430,000
440,000
485,000
535,000
546,000
595,000
675,000
What is the predicted sales quantity for an advertising
budget of $76,000?
Please round your answer to the nearest integer.
Note that the correct answer will be evaluated based...
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