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                                                  Affiliate Marketing      Affiliate marketing is a performance-based marketing strategy in which an affiliate promotes a merchant's products or services and earns a commission for each sale, lead, or other desired action made through their unique referral link. It is a type of online marketing that allows businesses to leverage the power of a network of affiliates to reach a larger audience and increase sales. The basic process of affiliate marketing involves three parties: the merchant, the affiliate, and the customer. The merchant is the company that sells the products or services, the affiliate is the marketer who promotes the merchant's products, and the customer is the person who purchases the product or service through the affiliate's unique referral link. Two Teir Affiliate marketing Two-tier affiliate marketing is a type of affiliate marketing program that allows affiliates to earn commissions not only from their own
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AG Travel and Tour management identified two groups of people interested in the holiday package consisting of accommodation, food and entertainment.



Question: AG Travel and Tour management identified two groups of people interested in the holiday package consisting of accommodation, food, and entertainment. The maximum amount Group 1 is willing to pay for room and board is 2,500 GHC and for entertainment is 500 GHC. For Group 2, the maximum amount they are willing to pay for room and board is GHC 1800 and for entertainment is GHC 750. Although AG Travel and Tour cannot identify members of the groups, it knows that each group values ​​the components of the package differently. Assuming that there is an equal number of members in each group and that the total membership in each group is one individual. If the marginal cost of providing the service (accommodation, food, or entertainment) per group is 1000 GHC.

Firstly, How much will the hotel charge members of each group for the vacation package if it can identify the members of each group? 

Secondly. What will be the benefit of AG Travel and Tour?

Third. Since AG Travel and Tour cannot determine the members of each group, what price should they charge each product? 

Fourthly. What is the benefit of AG Travel and Tour if (iii) 

Fifth. If AG Travel and Tour want to charge the package price, what is the highest price they can get?  What benefit will AG Travel and Tour get if it charges the package price indicated in (v) above? 

Answer: Since a company can choose members from each group, it can charge each group differently. For accommodation and food, the price will be determined based on the maximum willingness to pay for each group, which means the price for group 1 is 2500, and for group 2 it is 1800 compared to the 1,000 service cost. Also, for entertainment, the price will be set according to the maximum payment disposition per group, which means the price for Group 1 is 500, and Group 2 is 750 for the service fee of 1000.
Secondly. The profit will be 2500 + 1800 + 500 + 750-1000 * 4 = 1550
The third. Since the company is not able to identify the members of each group, it must charge the price according to the minimum willingness to pay in each group for each individual service. That is, for room and board, the price will be determined according to the maximum payment allocation for group 2, which is 1800 for service fee 1000. Also, for entertainment, the price will be determined according to the payment clause of group 1 maximum, which is 500 against the service charge of 1000.
According to the rooms. Secondly. The profit will be 1800 + 1800 + 500 + 500 - 1000 * 4 = 600
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