Question

Two companies A and B share the bulk of the market for a particular kind of product. Each is now planning its new marketing plans for the next year in an attempt to take some sales away from the other company. The total sales for the product are relatively fixed, so one company can only increase its sales by winning them away from the other. Each company is considering three possibilities: 1. Better packaging of the product, 2. Increased advertising, and 3. A slight reduction in price The costs of the three alternatives are quite comparable and sufficiently large that each company will select just one. The following table shows the estimated increase in percentage of the sales for company A for each combination of alternatives Ai and Bj. B1 B2 B3 A1 4 2 6 A2 2 10 1 A3 3 2 4 Each company must make its selection before learning the decision of the other company. Determine how each side will select its strategy.

Answer 1

Answer :-

Given that,

Two companies A and B share the bulk of the market for a particular kind of product.

Each is now planning its new marketing plans for the next year in an attempt to take some sales away from the other company.

The all out deals for the item are generally fixed, so one organization can just expand its deals by winning them away from the other. Each organization is thinking about three conceivable outcomes: 1. Better bundling of the item,

2. Expanded publicizing, and

3. A slight decrease in value The expenses of the three options are very equivalent and adequately enormous that each organization will choose only one.

The accompanying table demonstrates the assessed increment in level of the deals for organization A for every blend of choices

4. Each organization must make its choice before learning the choice of the other organization. Decide how each side will choose its procedure

here we need to determine how each side will select its strategy.

Better bundling of the item, + Expanded publicizing / per capita income

thus we concluded the variables followed presicely.