Marketing cost analysis shows that one of Buildco, Inc.'s customers is unprofitable, so Buildco should:
A) refuse to sell to that customer.
B) try to determine why this customer is unprofitable.
C) drop the customer and shift all fixed costs to the other customers.
D) assign a new salesperson to that account.
E) immediately develop a plan to sell more to that customer.

Question

Quizplus · Accepted Answer

Before making any decision, Buildco, Inc. should try to determine why this customer is unprofitable. This information can help them understand if there is any way to make the customer profitable, such as changing pricing or product offerings. Simply refusing to sell to the customer or dropping the customer without understanding why they are unprofitable may not be the best decision in the long run. Shifting fixed costs to other customers or assigning a new salesperson may also not be effective solutions without understanding the root cause of the unprofitability. Developing a plan to sell more to the customer may also not be beneficial if they cannot be made profitable.

Marketing Cost Analysis Shows That One of Buildco, Inc