RACQUETBALL MARKET ANALYSIS Market Analysis Ltd. July 2014 a. The market for this type of high-quality ball is C. According to industry trade association currently dominated by a single major projections, total number of players will grow competitor Woodrow Ltd. Woodrow specializes about 10 percent a year for the next 10 years and in manufacturing balls for all types of sports. It then stabilize at a relatively constant level. has been the only seller of high-quality racquetballs since the late 1970s. Its current price In order to assess relative preferences in the to retail outlets is $1.25 per ball (the retail marketplace, a concept test was performed. In markup is typically 100 percent, so these balls this test. 200 customers were asked to use both retail around $2.50 each, or $5.00 for the typical halls over a three- month period, and then pack of two)- specify which ball they would buy at various b. Historical data on the number of people playing prices. Many customers indicated they would the sport, the average retail price of balls, and the pay a premium for the Woodrow ball, based on (estimated) total sales of balls is given in the their satisfaction with it and its better durability. following table. Nevertheless, about 11 percent of the customers interviewed indicated a preference for the new Number Retail bouncinr ball at equal prices. The actual Year Price Ball Sold Players observed distribution of price premiums is as (Thousands). (per ball) (millions) follows. 2000 600 $1.75 5.932 2001 635 $1.75 6.229 Percent Who 2002 655 $1.80 6.506 Price Would 2003 700 $1.90 6.820 Ratio* Buy New Ball 2004 730 $1.90 7.161 0.5 0 2005 762 $1.90 7.895 10 11 2006 812 $2.00 7.895 15 41 2007 831 52.20 8.224 2.0 76 2008 877 $2.45 8.584 2.5 95 2009 931 $2.45 9.026 3.0 100 2010 967 $2.60 9.491 2011 1,020 $2.55 9.996 *Price of Woodrow ball / Price of new ball. 2012 1,077 $2.50 10.465 2013 1,139 $2.50 10.981