Question

 

Lorna's food truck sold $105,000 worth of Grilled Cheese Sandwiches in August. The total grilled cheese taco market in August was $2,100,000. Lorna's largest competitor's market share is 56%. (1 Mark Total)

a.What is Lorna's Revenue Market Share in August? (.25 Marks)

b.What is Lorna's Relative Market Share in August? (.25 Marks)

c.Based on your calculations, do you have any suggestions for Lorna? (.5 Marks)

On average, people buy 18 mascara's per year. However, people buy on average 6 mascara's from Joe's Mascara Store. (1 Mark Total)

a.What is the Joe's Mascara Usage Index? (0.5 Marks)

b.What does the Usage Index tell us? Do you have any suggestions for Joe?

Answer 1

a) The revenue market share is calculated by dividing the volume of goods sold by a particular firm by the total number of units in the market.

Market share = Companies sales / Total Market sales * 100

= 105000/2100000 * 100

= 5%

b) Relative market share indicates a firm's or a brand's market share against that of its leading competitor.

Relative market Share = Market share of Brand / Market share of biggest brand

= 5%/56%

= 0.09

C) Theres is lot of gap between the largest compitetor and Lorna share in the market. To reduce the gap the Lorne should explore the option of expanding the new areas and looking in to advertising and marketing. New fusion products should be introduced based on the surveys.

2) Usage Index: The ratio that compares the average consumption of products in a category by customers of a given brand with the average consumption of products in that category by all customers for the category

   Joe's Mascara Usage Index = Average Total Purchases in Category by Joes marcara/ Average Total Purchases in Category by All Customers for That Category

= 6/18

= 0.33

= 33%

The market share of joe mascara in the market is 33%