Customers of brands AW, TG and YM are generally loyal to their product brands. However, through clever marketing and adv
Posted: Wed May 04, 2022 7:36 am
Customers of brands AW, TG and YM are generally loyal to their
product brands. However, through clever marketing and advertising,
they may be persuaded to switch brands. Customer loyalty to a given
brand is estimated at 75%. Hence, the competitors have only a 25%
chance of realising a switch. Competitors launch their advertising
campaigns once a year. For AW customers, the probabilities of
switching to brands TG and YM are 0.1 and 0.15 respectively.
Customers of brand TG are likely to switch to AW and YM with
probabilities 0.2 and 0.05. Brand YM customers can switch to brands
AW and TG with equal probabilities
A) In the long-run how much market share (percentage) will
each brand command?
B) On average, how long will brand AW customers take to
switch back to brand AW for the first time?
C) On average, how long will brand YM customers take to
switch back to brand YM for the first time?
product brands. However, through clever marketing and advertising,
they may be persuaded to switch brands. Customer loyalty to a given
brand is estimated at 75%. Hence, the competitors have only a 25%
chance of realising a switch. Competitors launch their advertising
campaigns once a year. For AW customers, the probabilities of
switching to brands TG and YM are 0.1 and 0.15 respectively.
Customers of brand TG are likely to switch to AW and YM with
probabilities 0.2 and 0.05. Brand YM customers can switch to brands
AW and TG with equal probabilities
A) In the long-run how much market share (percentage) will
each brand command?
B) On average, how long will brand AW customers take to
switch back to brand AW for the first time?
C) On average, how long will brand YM customers take to
switch back to brand YM for the first time?