Question
When a new product enters a market, the new sales of that product will come from two sources: Some of the sales will come from
When a new product enters a market, the new sales of that product will come from two sources: Some of the sales will come from entirely new purchases that would have never been made if the new product didn't come to market. Some of the sales will come from the new product taking away purchases from the existing products. The easy way to estimate what will happen to the market share of other competitors is use an approach called the "Fair Share Draw." The Fair Share Draw rule make the assumption that the new product's sales that come from existing competitors will come in direct proportion to the existing market share of those products. The current market situation is shown below:
Sales($) | Market Share | |
Existing Product A | $700 | 35% |
Existing Product B | $700 | 35% |
Existing Product C | $600 | 30% |
Now a new product is introduced, and the sales revenue was $1000. If the new product's sales from three existing competitors come in 25% of the existing market share, what is the new sales revenue of Product C?
A) $450
B) $475
C) $500
D) $525
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started