Customers tend to exhibit loyalty to product brands but may be persuaded through clever marketing and advertising to switch brands. Consider the case of five brands: A, B, C, D and E. Customers “unyielding" loyalty to a given brand is estimated to switch the other brands with the probabilities given in the following transition matrix. A B D A 0.24 0.16 0.14 0.24 0.15 0.22 B 0.17 0.3 0.24 0.14 0.21 0.17 0.25 0.2 0.17 D 0.19 0.18 0.14 0.19 0.3 E 0.18 0.28 0.13 0.15 0.26 In the long run how much market share will brand D command?
Customers tend to exhibit loyalty to product brands but may be persuaded through clever marketing and advertising to switch brands. Consider the case of five brands: A, B, C, D and E. Customers “unyielding" loyalty to a given brand is estimated to switch the other brands with the probabilities given in the following transition matrix. A B D A 0.24 0.16 0.14 0.24 0.15 0.22 B 0.17 0.3 0.24 0.14 0.21 0.17 0.25 0.2 0.17 D 0.19 0.18 0.14 0.19 0.3 E 0.18 0.28 0.13 0.15 0.26 In the long run how much market share will brand D command?
Elementary Linear Algebra (MindTap Course List)
8th Edition
ISBN:9781305658004
Author:Ron Larson
Publisher:Ron Larson
Chapter2: Matrices
Section2.5: Markov Chain
Problem 16E: Consumer Preference In a population of 100,000 consumers, there are 20,000 users of Brand A, 30,000...
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Customers tend to exhibit loyalty to product brands but may be persuaded through
clever marketing and advertising to switch brands. Consider the case of five brands: A,
B, C, D and E. Customers "unyielding" loyalty to a given brand is estimated to switch
the other brands with the probabilities given in the following transition matrix.
A
в
D
E
A
0.24
0.16
0.22
0.14
0.24
B
0.17
0.3
0.24
0.14
0.15
0.21
0.17
0.25
0.2
0.17
D
0.19
0.18
0.14
0.19
0.3
E
0.18
0.28
0.13
0.15
0.26
In the long run, how much market share will brand D command?
a)
23.00%
b)
18.00%
20.00%
d)
17.00%
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