Brand C is a new brand name in the flavored coffee creamer market. We note that flavored coffee creamers have a relatively short purchase cycle (meaning they are bought often). Brand C will destabilize the coffee creamer market for a number of product purchase cycles. During that time, it will attract first time triers from both Brands A and B. To be successful, Brand C must develop loyal users who will repeat purchase regularly.

The table below provides the switching and holding rates. Generate the changes in brand share that will occur for all three brands over time—and until equilibrium is achieved. How stable is the equilibrium state—in your opinion?

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Number of Customers Switching and Repeating In Two Consecutive Purchase Periods for Brands A, B, and New Brand C Brand A Brand B Brand C @t(2) @t(2) @t(2) Total Brand A @ t(1) 30% 20% 50% 60 Brand B @ t(1) 50% 20% 30% 40 Brand C @ t(1) 60% 30% 10% 00 100