Examlex

Solved

Define Lifetime Value of a Customer

question 8

Essay

Define lifetime value of a customer.How has Apple Computer,with the development of the iPod product line and iTunes software,gained a competitive advantage over competitors such as Napster? Will Apple experience a higher or lower lifetime value of a customer and why?


Definitions:

Average Total Costs

The total cost of production divided by the quantity of output produced, representing the cost per unit of output.

Total Variable Costs

The total of all costs that vary with the level of output, including expenses such as raw materials, labor, and utilities that increase as production expands.

Average Variable Cost

A firm’s total variable cost divided by output (the quantity of product produced).

Economies of Scale

The cost advantages that enterprises obtain due to the size, output, or scale of their operation, with costs per unit of output generally decreasing with increasing scale.

Related Questions