KEL688 PDF ENG 1023
REVISED FEBRUARY 27, 2013
JULIE HENNESSY AND EVAN MEAGHER
KEL688
Maru Batting Center:
Customer Lifetime Value
Eager to avoid being distracted by the Tokyo Kitasuna team’s training for the summer 2012
Kōshien National High School Baseball Championship, Maru Keitou (丸継投) moved into the back office of Maru Batting Center (GK)1 (丸バッティングセンター (合同会社)), in the
Roppongi district of Tokyo’s Minato ward, to contemplate her fledgling company’s marketing strategy. A decorated former collegiate softball player with a PhD from Oxford University, Maru had a deep knowledge of the game and of her customers. She lacked a marketing background, however, so she had recently signed up for a hosted customer relationship management service that would allow her to track the cost of acquiring and serving each of her four main customer segments, data she could use to determine which segments to target in the upcoming year.
Business Model
Unlike most batting cage facilities in the United States, Maru Batting Center (MBC) was open only for appointments made at least 24 hours in advance. (See Exhibit 1 for pictures of batting cages in Japan.) Customers booked one or more of the eight batting cages that offered baseball and softball pitching machines for a specific period of time, typically in half-hour increments. Maru assigned one or more of her part-time workers—depending on the appointment—to open and supervise the facility. This not only avoided high fixed costs but also allowed MBC to avoid hiring full-time employees, which reduced labor costs by eliminating employee benefits.
1
Godo Kaisha (GK) is a type of Japanese business entity. It is often referred to as the “Japanese LLC,” though it has some legal differences from its American counterpart.
©2012 by the Kellogg School of Management at Northwestern University. This case was developed with support from the December
2009 graduates of the Executive MBA Program (EMP-76). This case was prepared by Evan Meagher ’09 under the
JULIE HENNESSY AND EVAN MEAGHER
KEL688
Maru Batting Center:
Customer Lifetime Value
Eager to avoid being distracted by the Tokyo Kitasuna team’s training for the summer 2012
Kōshien National High School Baseball Championship, Maru Keitou (丸継投) moved into the back office of Maru Batting Center (GK)1 (丸バッティングセンター (合同会社)), in the
Roppongi district of Tokyo’s Minato ward, to contemplate her fledgling company’s marketing strategy. A decorated former collegiate softball player with a PhD from Oxford University, Maru had a deep knowledge of the game and of her customers. She lacked a marketing background, however, so she had recently signed up for a hosted customer relationship management service that would allow her to track the cost of acquiring and serving each of her four main customer segments, data she could use to determine which segments to target in the upcoming year.
Business Model
Unlike most batting cage facilities in the United States, Maru Batting Center (MBC) was open only for appointments made at least 24 hours in advance. (See Exhibit 1 for pictures of batting cages in Japan.) Customers booked one or more of the eight batting cages that offered baseball and softball pitching machines for a specific period of time, typically in half-hour increments. Maru assigned one or more of her part-time workers—depending on the appointment—to open and supervise the facility. This not only avoided high fixed costs but also allowed MBC to avoid hiring full-time employees, which reduced labor costs by eliminating employee benefits.
1
Godo Kaisha (GK) is a type of Japanese business entity. It is often referred to as the “Japanese LLC,” though it has some legal differences from its American counterpart.
©2012 by the Kellogg School of Management at Northwestern University. This case was developed with support from the December
2009 graduates of the Executive MBA Program (EMP-76). This case was prepared by Evan Meagher ’09 under the