Problem:
A company is trying to predict the long-run market share of a new men's deodorant. Based on initial marketing studies, they believe that 35% of new purchasers in the market will ultimately try this brand. They believe that customers will purchase their brand about 40% 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 15% more than the average buyer.
Required:
Question1. Calculate the long-run market share that the company can anticipate under these assumptions. Show all work and computation.
Question2. Develop a general model for predicting long-run market share. Show all work and computation.