newconnect.mheducation.com MAR in to ytics Identifying a Firm\'s Most Profitable

Q: newconnect.mheducation.com MAR in to ytics Identifying a Firm's Most Profitable

1) item 3 2) item 1 3) item 3 4) item 3 5) item 1 Phy A PHY B PHY C PHY D SALES 10000 140000 15000 180000 COSTS 1250 400 125 600 2375 7625 PER VISIT SALE 1000 PER VISIT COST 135 Phy A PHY B PHY C PHY D SALES 10000 140000 15000 180000 COSTS 1250 400 125 600 2375 7625 PER VISIT SALE 1000 PER VISIT COST 135

ID: 2514829 • Letter: N

Question

newconnect.mheducation.com MAR in to ytics Identifying a Firm's Most Profitable Customers As a successful pharmaceutical marketing ma all of your customers are equally profitable, even if one generates more sales than others. Pharmaceutical manufacturers depend on physicians to prescribe their patented and branded drugs over competitive drugs. In one of your team's sales meetings, you suggested departing from industry practice, shifting toward viewing physicians as long-term strategic assets and, subsequently, targeting them based on potential profitability rather than current sales. In addition, you i by identifying the profitability of physicians, you will be able to not only segment. profile, and target the most profitable group, but also understand their characteristics and offer them more attention nager, you have come to realize that not nformed your team that You concluded your presentation by acknowledging that adapting your firm's service to your customer's profitability level can increase r success in the marketplace. Keeping in mind that your service can be customized to even higher profitability levels physicians can be given VIP treatment and special attention, and you sort physicians into profitability classifications. Highly profitable customers of average profitability can be converted to better profitability classifications, while those contributing to losses can be dropped encouraged to generate higher profitability. Unprofitable customers can be nurtured and Figure 1: Application of the Activity-Based Costing (ABC) Method to Customer Physicians sales of Prescription urO-x Generated by a Partieular Physieian (Measured by INS Heaith) Physician CA)I $10,000 Physieian (B): $14.000 Physieian (C)s s15,000 Physician D)s $18.000 Salesperson Travel ($125 per visit) Physieian (a)e 10 Physician (C)I 5 Physielan (D)s 30 Prev 1 of Next 4

Explanation / Answer

1) item 3

2) item 1

3) item 3

4) item 3

5) item 1

Phy A

PHY B

PHY C

PHY D

SALES

10000

140000

15000

180000

COSTS

1250

400

125

600

2375

7625

PER VISIT SALE

1000

PER VISIT COST

135