The $25 Referral Credit represents the fair value of the cost Runway would pay to acquire a new customer from an unrelated third party or marketing firm who is not a purchaser of its products. The program is open to all of Runway’s customers and does not need to be combined with any initial or existing purchases. Required: 1. How should the $25 Referral Credit be recorded in Runway’s Income Statement — as a reduction of revenue or as a marketing expense? 2.
Runway Discount (“Runway” or the “Company”) is a privately held online retailer that sells discounted high-end fashion. It competes with three other online retailers and many traditional retailers. In an effort to increase its sales and customer base, Runway implemented a customer referral marketing campaign (the “Refer-a-Friend Program”) whereby existing customers can refer friends to Runway and receive a $25 credit towards the purchase of future merchandise. The terms of the program are as follows: Runway offers existing customers (the “Existing Customer”) a $25 credit (the “$25 Referral Credit”) if the Existing Customer refers a friend (the “New Customer”) to Runway’s Web site and the New Customer purchases merchandise from Runway. After a purchase is made by the New Customer, the Existing Customer receives a $25 credit to be applied to a future purchase from Runway.
Firstly they can simply outsource the competition to FightWare and pay them the sum of $25,000. The second alternative is to arrange for an in-house designing for the competition while partnering with the local gaming clubs and hiring marketing executives. The third alternative is to pursue the traditional path of advertising and campaigning thereby provoking the users to buy the software which will enhance their gaming experiences. Chosen Alternative: While analyzing the three alternative
We will cater to market roughly 100 miles in diameter from the xxxxxx area. CES will provide home automation and home theater solutions to the people in the market area. In order to fund the startup costs of CES the owner Blake has sold a piece of investment real estate and was able to obtain $93,000 in profit from the sale. These funds will be used to provide the necessary startup capital for CES. $60,000 will be put in a business account for startup costs and the remaining $33,000 will be put in savings and be available as a liquid asset for gaps in product purchase and customer payment.
Hoang Thi Thanh Ha – 13200154 Case 13-1 Refer-a-Friend Program 1. How should the $25 Referral Credit be record in Runway’s Income Statement – as a reduction of revenue or as a marketing expense? By implementing the “Refer-a-Friend Program” Runway Discount is taking the proper steps to increase its sales and its customer base. With the application of this program, however, there are some additional procedures that must be followed when recording transactions involving the $25 Referral Credit. According to ASC 605-50-45-1 Revenue Recognition, a vendor may give a customer a sales incentive or other consideration.
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Another great benefit that Macys employees receive are the employee discount; they receive what is called a twenty percent off back of the house discount. The discount is for any brand the employee might want to buy clothes, shoes, or bags from. This back of the house discount is giving to employees by applying to either a debit or credit card. To
Answer: The Groupon Promise is that any customer can return a Groupon, no questions asked, if they feel like Groupon has let them down. The Groupon promise affects a consumer’s perceived risk and cognitive dissonance by allowing the customer to feel as if there is no risk when purchasing a Groupon. The customer is even able to return the Groupon if they have already used it and were not satisfied. This allows a subscriber to purchase the Groupons without the worry of wasting money. 3.
Their effort for customer’s satisfaction is called “Deliver WOW through service.” To create a superior customer experience, they have been many things. First of all, they provide not only free shipping in both directions but also a 365- day return policy. Customers do not have to worry about shipping fee and inconveniences from return process by using Zappos. They also focus on the function of the call center. To satisfy the customer, Zappos never outsourced their call center, which means they do not work from a script.
Sales staff are to promote to younger customers recommending our new range of packaging during purchasers. 12 mths Milestones 4 weekly • Introducing a club membership for ‘tweens’ that gives them free gifts for purchases over specific amounts. Sales staff on conclusion of sales are to promote our new club membership, pointing out benefits of membership with free gifts with specific purchasing amounts, this can be achieved by promoting our new range of products. 12 mths Milestones