Describe Mattels position in the market compared to competition using market share, the penetration rate, concentration ratio, and relative market share. Explain how well you think they are doing in both markets using the answers you have calculated above. You must discuss all of the above parameters.
Market Share Metrics (market share, relative market share, market concentration) A high growth toy market in the Greater Charleston Area has the following five brands competing in two tourist sections, Mt. Pleasant and Folly Beach (yearly sales). Hint: Unit price is the consistent for each brand independent of where they are sold. Interpretation Calculations (Questions 1-7) 1. What is Doug \& Melissa's relative market share in Mt. Pleasant (use unit market share)? 6000/7000=85.71% 2. What are Mattel's unit market shares in Folly Beach and also Greater Charleston? Mkt share at folly beach: 200/1000)100%=20% (unit of Mattel's sold at greater Charleston / total unit sold of all toys at greater Charleston) 100 %(300/2000)100%=15% Mkt share at Greater CHS: 15% 3. What is Mattel's relative market share (use revenue market share)? (15000)/(50000)100=30% 4. What is the 3-firm market concentration in Mt. Pleasant (use unit market share)? What is the 3-firm concentration for all markets (use overall revenue market share)? Mt. Pleasant: Lego =(350/1000)100=35% Fuzzy toys =(200/1000)100=20% Wacky Wiz =(200/1000)100=20% 3 firm concentration ratio =35%+20%+20%=75% All Mkts: Mattel=(15000/50,000)100=30%Lego=(14000/50000)100=28%Fuzzytoys=(9000/50000))100=18%3firmconcentrationratio=30%+28%+18%=76% If the potential market in Mt. Pleasant is 2000 customers and the potential market in Folly Beach is 5000 customers, what are the respective market penetration rates for this product category (presume 1 purchase / customer). 5. Mt. Pleasant Penetration Rate: 1000/2000=0.5=50% 6. Folly Beach Penetration Rate: 1000/5000=0.2=20% 7. Overall (Both Markets) Penetration Rate 150/2000=0.075=7.5% Interpretation Concepts (Questions 1-3): Suppose you are a marketing consultant for Mattel. 1. Describe Mattel's position in the market compared to competition using market share, the penetration rate, concentration ratio, and relative market share. Explain how well you think they are doing in both markets using the answers you have calculated above. You must discuss all of the above parameters
