Q. Select any business near the Area and find out the segment?

Business: Pan shop Segment: Upper and lower Middle class Area: ARA Frequency of Buying: once in 4 days Cost of product-Rs 4-5

In theory, the customer lifetime value depicts exactly what each customer means to firm in monetary terms. For example You might be worth 1500Rs to a barbers shop throughout life and probably your worth must be thousands of dollars to a local grocery store if he retains you for life. However, this is in theory. In reality, it becomes very difficult to calculate customer lifetime value.

Calculating Customer Lifetime value

Let see in detail how calculating customer lifetime value actually helps the firm. Calculation of customer lifetime value Annual customer revenue Rs 600 Average number of loyal years 21 Company profit margin 12% Customer lifetime value Rs1500 Cost of attracting new customers Cost of sales calls (Including personnel salaries, expenses, allowances etc) Rs700 Average number of sales calls to convert prospect to customer 4 Cost of attracting a new customer Rs2000 These costs may vary as some customers might even need more convincing whereas others might already be looking for the product. Now Clearly, the company is spending more on attracting new customers rather than retaining them. Thus the calculation of customer lifetime value helps in understanding exactly what level of revenue is it generating from each customer. Furthermore, by calculating costs you can get an idea of averaging out the cost of attracting new customers and retaining old customers to gain maximum profits.

Advantages of calculating Customer lifetime value CLV makes us look at customer retention expenses as an asset rather than a liability

It brings out a balance between cost of attracting new customers and profits in retaining old customers CLV can be a basis for costs to be associated in promotions and communications to attract new customers and retain old customers CLV can be used to calculate customer equity

Q. Why companies like DHL, Fed ex are important to the success of an organization?
Logistics can be referred to as an enterprise planning network used for the purpose of information, material management, capital flows. In the words of a layman, it can be described as delivering at the right time, for the right price and in the right condition. When seen in the modern day competitive business scenario, it includes complex information along with importance to the control and communication systems of the organization. No matter the size and the area of operations of an organization, logistics information plays an important role in the achievement of the goals of the organization. Role of Logistics has evolved in the present very competitive business environment and is primarily concerned with the efficient and effective management of the project life cycles of the organization and its resultant efficiencies. It can be described as a complete process that involves the total supply chain management that is formed for the purpose of achievement of common business objectives of the organization. Need for development of Logistics Logistics does not refer to a single activity performed for delivery of goods, it extends to delivery of goods at the right time, at the right place, in the right condition and at the right price. The logistics manager ensures that no fraud is committed during the logistics process and the logistics systems run in accordance with the predefined plans and policies of the organization. An effective and efficient logistics system ensures the smooth functioning of the organization and it is rightly considered as an integral part of the plans of the organization. Logistics business plan The plan must be clearly defined so that there is no confusion in the minds of the logistics team. This clarity will help to accomplish the desired objectives of the organization. It must be drafted in accordance with the objectives of the organization. Its aim must be to provide timely delivery of goods besides rendering normal functions of logistics under strict deadlines and in conformity with business goals.

There is military logistics, medical logistics, business logistics, production logistics, so on and so forth. And both shipping and logistics contribute significantly to the economy of the world. Logistics simply means 'logos' in Greek and in business lexicon, it means a business planning

framework for the management of material, service, information, and capital flows. Even complex information communication and control systems required in a fast-changing business environment forms part of it. The main objective of production logistics is to ensure that each machine at the production station is fed with correct product, that to in correct quantity, in correct quality, and at correct point of time. Logistics is not only about transporting, it also involves simplifying the processes and in the process adding value and get rid of non-value ones. When it comes to business logistics, logisticians are supposed to manage either the inbound logistics or outbound logistics. A skilled logistician is known to manage various inventory administration processes, transportation, purchasing, warehousing, etc. Considering his expertise in this area, coordination of resources is easily taken care of in the organization. In Military, the job of a logistician is considered crucial, as he has to move resources more than often. Supply line has to be constantly maintained in an armed force, or else with in no time our military on the borders will have no resources to defend their territories. Simply , logistics management is an essential part of supply chain and exclusively looks into strategizing, execution of supplies and services from the point of source to the point of destination, in an attempt to meet client requirements. In these fast changing times, the arrival of logistics management software will help automating the work flow and the administration of the whole network will become much easier.

Prepared By Vivek Kumar Jain TPS-19116