Preliminary data also suggest that the brand will attract heavier-than average buyers,

A company is trying to predict the long-run market share of a new men’s deodorant.8 Based on initial marketing studies, they believe that 35% of new purchasers in this market will ultimately try this brand. They believe that customers will purchase their brand about 60% of the time in the future. Preliminary data also suggest that the brand will attract heavier-than average buyers, such as those who exercise frequently and participate in sports, and that they will purchase about 20% more than the average buyer.

a. Calculate the long-run market share that the company can anticipate under these assumptions.

b. Develop a general model for predicting longrun market share.

Solution:

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