Write short answers to the following questions (the last one is bonus!). Please try to be as succinct as possible. Give relevant answers, and prefer bullet point sentences where possible.
Remember: 1. Your instructor doesn’t give credit to copycats in an online final exam. Logo!
2. The rule “No explanation, no credit!” will be followed strictly in the grading of your answers.
LASTİK AL (meaning “Buy Tyre!” or “Take Tyre!” in Turkish) is a Turkish clicks-and-mortar tyre retailer in the Ünalan county of Üsküdar, İstanbul. The website address of this tyre retailer is www.lastikal.com.tr, a ccTLD registered through IdeaSoft.com.tr according to its Domain Whois record with DomainWhitePages.com. The ccTLD domain name registration dates April 07, 2009 and is good through April 06, 2023. The business is registered in İstanbul Chamber of Commerce as Polat Motorlu Araçlar Tic. Ltd. Şti. meaning “Polat Motor Vehicles Commerce, LLC” in Turkish.
The tyre retail market in Turkey is associated with fierce competition since there are not just dozens, but literally thousands of players of all sizes. They all want to grab a chunk of the tyre retailing market in Turkey which clearly shrank dramatically in Q2 of 2020 due to the COVID-19 pandemic. The spread of the coronavirus disease in Turkey led to the government’s (I mean the President’s) stay-home orders at the weekends and the ban on intercity travel in 16 metropolitan cities of the country that lasted until the beginning of Q3. Now that intercity travel both for private vehicles and public travel companies is permitted and stay-home orders are over, tens of millions of people have claimed their right to mobility on the roads again.
In this panorama of the pandemic landscape of Turkey LASTİK AL hopes to observe rapidly soaring sales which will let the company liquidate the vast build-up of its tyre inventory. However, there are many other pure-play and clicks-and-mortar as well as bricks-only dealers who pursue the very same goal too: Maximize sales in the wake of increased activity of motor vehicles running on rubber tyres and seize the opportunity as the summer holiday season is just around the corner: In this context, LASTİK AL faces stiff competition from LASTIKCIM.com.tr (Lastikçim meaning “My Tyre Seller” in Turkish) and LASTIK.com.tr among others.
To move ahead of these merciless competitors, LASTİK AL decides to design and launch a Google Ads campaign in which it primarily aspires to be the leading dealer of PIRELLI tyres in Turkey. To this end, it kicks off initially a very simple and plain PPC campaign bidding for the following key phrase: PIRELLI CINTURATO P7 18 inch
This is one of the best-seller models of the PIRELLI brand tyres all over the world. Introduced first in 2009, CINTURATO P7 series was a huge success on the Italian tyre giant’s wallet. In early 2020, PIRELLI debuted the second generation of this tyre series under such names as “NEW CINTURATO P7”, “CINTURATO P7C2” and “CINTURATO P7 2”. Production actually started as early as in December 2019. PIRELLI made the first announcement on its website in March and posted an unveiling video of the tyre on its official Youtubee channel on April 08. The video received around 7,000 views thus far. Also automobile magazines published the news for the first time in March 2020. Though, no industry authority or website put the tyre to test yet.
LASTİK AL is one of the few retailers in Turkey which offers this tyre on its product portfolio. Now it is time to heighten this tyre’s brand awareness and boost sales with a Google Ads campaign.
For simplicity and without loss of generality, assume that LASTİK AL runs a one-month-long campaign for this particular key phrase only. The landing page hyperlinked from the ad text (copy) of the dealer is the home page address https://www.lastikal.com.tr/. The average selling price of 18″ PIRELLI CINTURATO P7 tyres is 1,584 TL after a discount of 30%. For one month from the launch of this Ads campaign, the dealer monitors and records all the hits on that landing page using the web analytics software Adobe Analytics, which reports that the view-to-cart ratio on the landing page is 1.50% while the cart conversion rate is around 16.00%. On the other hand, Google Analytics reports that during the 30-day campaign period, the dealer’s ad was displayed about 15,600 times with a CTR of 3.75%. The dealer had initially set the PPC bid for “PIRELLI CINTURATO P7 18 inch” to 250 kuruş (100 kuruş = 1 TL) with the hope to achieve a ROI of at least 20%.
Adobe Analytics reports reveal that when a would-be customer’s click on the ad actually results in a completed online order, on average 3.00 tyres are sold per customer. Why is it not exactly one or another integer number? Simply because some customers buy just one tyre, while others buy two tyres, and the rest opts for the purchase of a full set of 4 tyres.
a-) What is the actual (effective) conversion rate (CR) for the visitors of the landing page of LASTİKAL.com.tr’s Ads campaign? This is, how many tyres are sold for every landing of a click on the ad copy’s landing page?
b-) According to these statistics, what should be the unit wholesale price paid by LASTIKAL.com.tr to PIRELLI TÜRKİYE, Inc. for one such tyre imported to or manufactured in Turkey?
Is this the maximum or the minimum unit wholesale price that should be paid by the dealer to PIRELLI TÜRKİYE, Inc.?
Show all steps of your calculations and explain which calculations you perform why.
No explanation means no credit! Minimal partial credit for wrong answers!