Question

TURNER TEST PREP CO. CASE Overview: Jessica Turner is the founder and CEO of Turner Test Prep, a California company specializing in preparing people for the Certified Public Accountant (CPA) exam. In the Spring of 2003 she felt that she was not achieving market share and growing in the right direction. Alter three years of operation. Tumer had about 10 percent of the market and was facing fierce competition from her primary rival, National Testing Services. Jessica wanted to improve marketing and gain market share. 1. What is Jessica's break-even point? (3 points) Fixed Costs Professor Salaries for 1200 hours/year @ $75/hour Office Space @ S2000/month Utilities and Insurances @ S1000/month Printing @ $500/month Marketing @ S400/month Travel @ $200/month Total $ 90,000 $ 24, pp- $ 13000 $ 6000 $300 $200 $139,000 Variable Costs Materials @ $600/student $600.00 Selling Price per student slloo Number of Students Jessica Needs to break even? Break-Eyen Point - Total Fixed Costs/(Selling Price - Variable Costs) 279 student Ŝhe need, 3 110o -8600 $500 She need 280 students the rest of the money its gonna go to profil How does Turner Test Prep overcome the competition from NTC? (8 points) NTC has the advantage of being a leader in test prep services and has proven through longevity and its high passage rates that it will help students succeed. NTC has the name brand recognition, the proven track record, and the reputation of being the program to take if a student wants to pass the CPA exam. This makes it difficult for Turner to compete, so Jessica needs to market her competitive advantages. What does Jessica need to do to showcase her strengths over NTC? She need that Because NTC boasts a higher overall pass rate For all Its-courses than any other test Prep Center in the Country.

please answer all questions

Answer 1

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1.

Fixed Costs

Professor Salaries for 1200 hours/year @ $75/hour                               $90,000

Office Space @ $2000/month                                                               $24,000

Utilities and Insurances @ $1000/month                                              $12,000

Printing @ $500/month                                                                           $6,000

Marketing @ $400/month                                                                        $4,800

Travel @ $200/month                                                                              $2,400

        Total                                                                                               $139,200

Variable Costs

Materials @ $600/student            $600.00

Selling Price per student            $1,100

Number of Students Jessica Needs to break even?

            Break-Even Point = Total Fixed Costs/(Selling Price – Variable Costs)

                                                139,200/(1,100-600)=278.4

2.1) Jessica could develop more platforms, she could start to advertise and promote her business on social media sites, such as Facebook and Twitter. This would be a great way for her to let the public know of any specials or sales they are running as well as be a great platform for customers to post reviews and suggestions.

2) She should be doing everything in her power to raise her passing scores. Such as, more personal teacher-to-student time. Studies have shown that one-on-one tutoring improves test scores. She could also find different study and test taking techniques. Some say that chewing gum during a big test helps to remember the material better.

3) She could spend more time and money on promoting her business a few extra dollars for a radio ad could bring in 10 or 20 more customers, which could lead to more word-to-mouth referrals, which means more customers in the long run.

4) Jessica could cut cost in any way possible, possible fins a cheaper location to have her business, this would lower her cost for her customers and give her an advantage over NTC.

3.

1) Jessica could try to implement a system for customer reviews and suggestions. By listening to her customers she could figure out exactly where she needs to improve with her business and how to draw in more customers and gain a larger market share.

2) She could offer discounts and sale prices on special occasions or maybe offer bundle packages for different types of tutoring. I, for one, would be more drawn to a service if it was on sale or at a discounted price. I feel that this would bring in more customers.

3) She could also offer a trial study session so customers could try out her service to see if it could actually work for them. Without giving away too many study techniques during the trial, students could experience first hand what her services could do for them.

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