Metrics Mastery - Market Share

Metrics Mastery Quiz – Market Share 1. Using the information from Metric 3 Case 3, the revenue market shares for companies A, B, C and D respectively, are (see the “instructions for metric mastery quizzes” pdf in the content section on D2L FOR Metric 3 Case 3 info):     6.7%, 19.4%, 44.4% and 29.4% 17%, 49%, 112% and 29.4% 10.1%, 26.7%, 33.3% and 29.8% 6.7%, 22.1%, 46.2% and 26.4% Solution: Market Share (%) = Brand’s Sales (in $ or #)/ Total Market Sales (in $ or #) x 100     A = $17/ $252 x 100 = 6.7% B =$49/ $252 x 100 = 19.4% C = $112/ $252 x 100 = 44.4% D = $74/ $252 x 100 = 29.4% 2. Revenue market share differs from________ in that it reflects the prices at which goods are sold rather than the number of sales in the market.     Unit Market Share Relative Market Share Market Penetration Price Market Share 3. Using the information from Metric 3 Case 3, the three firm concentration ratio in unit terms is (see the “instructions for metric mastery quizzes” pdf in the content section on D2L FOR Metric 3 Case 3 info):      89.9% 66.6% 70.2% 93.3% None of the answers. Solution: Three Firm Concentration Ratio = % Market Share Competitor 1 + % Market Share Competitor 2 +… 3 Three Firm Ratio = 26.6% + 33.45 + 29.7 = 89.9% 4. Market Share:     Is an indicator of how well a firm is doing against its competitors. Is closely monitored for signs of change in the competitive landscape, and it frequently drives strategic or tactical action. Both (a) and (b) None of the above. 5. Using the information from Metric 3 Case 3, the Herfindahl Index on a revenue basis for the industry X is (see the “instructions for metric mastery quizzes” pdf in the content section on D2L FOR Metric 3 Case 3 info)?:      0.326 0.266 0.282 0.362 None of the answers. Solution: Herfindahl Index = Sum (% Market Share of each Product/ Company) ^2 A = (6.7) ^2 = 44.89% B = (19.4) ^2 = 376.36% C = (44.4) ^2 = 1,971.36% D = (29.3) ^2 = 858.49% = 3251.11  0.326 6. Using the information from Metric 3 Case 3, managers at Company B determine their firm’s relative market share in unit terms to be (see the “instructions for metric mastery quizzes” pdf in the content section on D2L FOR Metric 3 Case 3 info):      30.3% 67.9% 79.8% 87.9% 89.7% Solution: Relative Market Share = Brand Sales (in $ or #)/ Largest Competitor’s Sales ($ or #) x 100 91.0/ 114.0 x 100 = 79.82% 7. Relative Market Share:      Is the ratio of the brand or company’s market share to that of its largest competitor. Is used to assess a brand or firm’s success and its position in the market. Offers a way to benchmark a firm’s market performance against that of its largest competitor’s performance. All of the above. None of the above. 8. Using the information from Metric 3 Case 3, the Director of Marketing for Company A calculates Company A’s relative market share in terms of revenue to be (see the “instructions for metric mastery quizzes” pdf in the content section on D2L FOR Metric 3 Case 3 info):      15.2% 6.7% 9.6% 14.4% 30.3% Solution: Relative Market Share = Brand Sales (in $ or #)/ Largest Competitor’s Sales ($ or #) x 100 $17/ $112 x 100 = 15.17% 9. Market Share is defined as:      The percentage of a market accounted by a firm. The comparative strength of a firm to its largest competitor. Purchases of a product category as a percentage of total population. All of the above. None of the above. 10. Using the information from Metric 3 Case 3, the unit market shares for companies A, B, C and D respectively, are (see the “instructions for metric mastery quizzes” pdf in the content section on D2L FOR Metric 3 Case 3 info):      10.1%, 26.7%, 33.4% and 29.8% 17%, 49%, 112% and 29.8% 10.1%, 19.4%, 44.4% and 29.5% 5.3%, 22.1%, 46.2% and 26.4% None of the answers. Solution: Market Share (%) = Brand’s Sales (in $ or #)/ Total Market Sales (in $ or #) x 100 A = 34.5/ $341.0 x 100 = 10.1% B = 91.0/ $341.0 x 100 = 26.6% C = 114.0/ $341.0 x 100 = 33.4% D = 101.5/ $341.0 x 100 = 29.7%