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Find the solution. WB and ZA are two competing grocery stores in a particular region. Currently WB holds 39% of the market and ZA holds
Find the solution.
WB and ZA are two competing grocery stores in a particular region. Currently WB holds 39% of the market and ZA holds 61% of the market. WB is contemplating an advertising campaign to attract more of ZA's customers to its store. The marketing team at WB believes that their promotional strategy will increase the probability of a ZA customer switching to WB. They calculated that as a result of the advertising campaign, the expected long term market share of WB will be 47% and the long term market share of ZA will be 53%. Assume that each week 10,000 shop at one of the stores (either WB or ZA) and that the average profit per customer is $12. What is the maximum that WB should be willing to pay for the advertising campaignStep by Step Solution
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