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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. 8 Based on an example of the Parfitt-Collins model in Gary L. Lilien, Philip Kotler, and K. Sridhar Moorthy, Marketing Models (Englewood Cliffs, NJ: Prentice Hall, 1992): 483.
a. Calculate the long-run market share that the company can anticipate under these assumptions.
b. Develop a general model for predicting long-run market share.
Use the concept of cross elasticity of demand to distinguish between complements and substitutes.
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In Mexico in 1950, the richest 5% earned 40% of the income and the poorest 40% earned 14.3% of the income. In 1957, the richest 5% earned 37% of the income and the poorest 40% earned 11.3% of the income. In 1963, the richest 5% earned 28.8% of the in..
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