Question

The purchase patterns for two brands of toothpaste can be expressed as a Markov process with the following transition probabilities:

To |
||

From |
Special B |
MDA |

Special B |
0.80 | 0.20 |

MDA |
0.25 | 0.75 |

- Which brand appears to have the most loyal customers? (MDA or
special B)

Explain. - What are the projected market shares for the two brands? If required, round your answer to three decimal places. π1 =_ , π2 =_

Answer #1

a). Special B appears to have more loyal customers because it retains 80% of its customers and more customers are shifting from MDA to Special B (0.25) than from Special B to MDA (0.20).

b). Let q1 and q2 be the projected market shares of the Special B and MDA. Then,

q1 = 0.80q1 + 0.20q2 ----- (a)

q2 = 0.25q1 + 0.75q2 ----- (b)

q1 + q2 = 1 ---- (c)

Then, q1 = 1-q2

Substituting in (b), we get

q2 = 0.25(1-q2) + 0.75q2

q2 = 0.5

q1 = 1-q2 = 0.5

Projected market share for both brands is 50%, respectively.

Problem 16-09 (Algorithmic)
The purchase patterns for two brands of toothpaste can be
expressed as a Markov process with the following transition
probabilities:
To
From
Special B
MDA
Special B
0.95
0.05
MDA
0.25
0.75
Which brand appears to have the most loyal customers?
Explain.
The input in the box below will not be graded, but may be reviewed
and considered by your instructor.
What are the projected market shares for the two brands? If
required, round your answer...

Problem 16-09 (Algorithmic)
The purchase patterns for two brands of toothpaste can be
expressed as a Markov process with the following transition
probabilities:
To
From
Special B
MDA
Special B
0.90
0.10
MDA
0.15
0.85
Which brand appears to have the most loyal customers?
Special B
Explain.
The input in the box below will not be graded, but may be reviewed
and considered by your instructor.
What are the projected market shares for the two brands? If
required, round your...

Please answer the following Case
analysis questions
1-How is New Balance performing compared to its primary rivals?
How will the acquisition of Reebok by Adidas impact the structure
of the athletic shoe industry? Is this likely to be favorable or
unfavorable for New Balance?
2- What issues does New Balance management need to address?
3-What recommendations would you make to New Balance Management?
What does New Balance need to do to continue to be successful?
Should management continue to invest...

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