Dig We Must, Inc. produces three different grades of shovels. The differences among the shovels are due to the materials and construction of the handles. These differences result in cost and selling price differences. DWM's product strategy is to provide high quality, long-lasting tools. Originally, the target market was construction and landscape design companies. They introduced the low-price model when home renovation enthusiasts started asking for DWM products but seemed reluctant to pay the price for professional-grade tools. Estimated sales information for the upcoming 6 months is as follows (assume an even distribution over the 6 months).

	Market Size shovels)	DWM Sales shovels)	Selling Price	Variable Costs
Professional Grade	30,000	25,000	150	50
Performance Grade	20,000	5,000	90	40
Home Repairs	50,000	10,000	30	15

Due to an upturn in the housing market and a stronger economy,3 months into this 6-month planning period,

actual sales information indicated the following.

	Market Size shovels)	DWM Sales shovels)	Selling Price	Variable Costs
Professional Grade	20,000	18.000	150	50
Performance Grade	8,000	1,800	60	$ 40
Home Repairs	35,000	10,000	30	15

REQUIRED

1. Analyze the market share and market size variances.
2. Analyze the actual results in terms of DWM's product differentiation goals. Make suggestions to DWM management.
3. As a result of the results for the first 3 months, DWM increased the selling price of the professional-grade shovel to 160 and the home repairs shovel to $35.Further, the selling price of the performance grade shovel was reduced to $85.

The sales results for the second 3 months are as follows.

	Market Size shovels)	DWM Sales shovels)	Selling Price	Variable Costs
Professional Grade	20,000	17,000	160	50
Performance Grade	10,000	2,000	85	40
Home Repairs	40,000	15,000	35	15

1. Analyze the market changes and the effect of the sales price change.
2. Make recommendations to DWM management for next year's peak 6-month season.