It’s 1994, and you are one of the corporate brand managers for Blockbuster Video(remember those?). You are interested in whether a 3-year long marketing campaign centered on extended weekend rentals for “Preferred” clients would be profitable. Based on Field tests in select markets, giving Preferred membership customers a weekly coupon for the latest blockbusters seems to increase the number rentals over the weekends if thekey titles are adequately stocked.1. The average Preferred customer rents 2 old titles at $1.99 and 1 blockbuster title for$4.99 each week. The data suggest that customers will rent TWO additional blockbuster movies over the weekend when given a $2.00 discount per weekend blockbuster title.Thus, each customer rents on average 2 old titles (at $1.99), 1 blockbuster title duringthe week (at $4.99), and at least 2 discounted blockbuster titles (at $2.99) over the weekend

.2. Each store on average hosts an average of 3,000 Preferred customers from thesurrounding area. Further, these customers are very loyal and retention based onyearly rental records is about 95%. Acquisition cost associated with the Preferredmembership is approximately $100 per customer.3. The discount rate for the industry is about 17%. The companyAf?cA????1A????1s average gross marginis 34%.4. Costs associated with the Preferred customer appreciation program include:a) marketing expenses (weekly direct mailings, local newspaper insertstargeting those with Preferred membership cards, emails, andcommunication) are about $3,500 per week; andb) marketing cost to continually train employees (high turnover) that is about$200 per week.These costs are Iixed regardless of total number of Preferred renters.TO DOa) Identify and list all assumptions for the CLV problem;b) setup and complete a CLV calculation ;c) answer and explain: Is this a good venture? Why or why not?Requires excel table with solutions and format. will award full points for good jobIt’s 1994, and you are one of the corporate brand managers for Blockbuster Video(remember those?). You are interested in whether a 3-year long marketing campaigncentered on extended weekend rentals for “Preferred” clients would be proIitable. Basedon Iield tests in select markets, giving Preferred membership customers a weekly couponfor the latest blockbusters seems to increase the number rentals over the weekends if thekey titles are adequately stocked.1. The average Preferred customer rents 2 old titles at $1.99 and 1 blockbuster title for$4.99 each week. The data suggest that customers will rent TWO additional blockbustermovies over the weekend when given a $2.00 discount per weekend blockbuster title.Thus, each customer rents on average 2 old titles (at $1.99), 1 blockbuster title duringthe week (at $4.99), and at least 2 discounted blockbuster titles (at $2.99) over theweekend.2. Each store on average hosts an average of 3,000 Preferred customers from thesurrounding area. Further, these customers are very loyal and retention based onyearly rental records is about 95%. Acquisition cost associated with the Preferredmembership is approximately $100 per customer.3. The discount rate for the industry is about 17%. The companyAf?cA????1A????1s average gross marginis 34%.4. Costs associated with the Preferred customer appreciation program include:a) marketing expenses (weekly direct mailings, local newspaper insertstargeting those with Preferred membership cards, emails, andcommunication) are about $3,500 per week; andb) marketing cost to continually train employees (high turnover) that is about$200 per week.These costs are Iixed regardless of total number of Preferred renters.TO DOa) Identify and list all assumptions for the CLV problem;b) setup and complete a CLV calculation ;c) answer and explain: Is this a good venture? Why or why not?Requires excel table with solutions and format. will award full points for good job