In this problem, every row cell has a proportion equal to that (brand) columns share Markets often start out with highly differentiated products Over time, product design features begin to converge so that the product is viewed by consumers as a commodity This effect which destroyed brand advantages for TV sets is well underway for both personal computers and laptops Tablets are not likely to be immune for very long How will this market behave over time What strategic lessons can be learned Number of Customers Switching and Repeating In Two Consecutive Purchase Periods for Brands A, B, and C When a Commodity Market Exists Brand A t(2) Brand B t(2) Brand C t(2) Brand A 20 25 10 35 14 4 Total 45 t(1) Brand B 10 35 5 29 t(1) switchers 45 repeaters 45 switchers 23 switchers 32 repeaters 23 switchers 32 7 36 23 Brand C 14 4 7 36 10 24 32 t(1) switchers 45 switchers 23 repeaters 32 45 23 32 100

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Question: In this problem, every row cell has a proportion equal to that (brand) columns share. Markets often start out with highly differentiated products. Over time,

In this problem, every row cell has a proportion equal to that (brand) column’s share. Markets often start out with highly differentiated products.

Over time, product design features begin to converge so that the product is viewed by consumers as a commodity. This effect which destroyed brand advantages for TV sets is well-underway for both personal computers and laptops. Tablets are not likely to be immune for very long.

Number of Customers Switching and Repeating In Two Consecutive Purchase Periods for

How will this market behave over time? What strategic lessons can be learned?

Number of Customers Switching and Repeating In Two Consecutive Purchase Periods for Brands A, B, and C When a Commodity Market Exists Brand A @t(2) Brand B @t(2) Brand C @ t(2) Brand A 20.25 10.35 14.4 Total 45 @t(1) Brand B 10.35 5.29 @t(1) switchers=45% repeaters 45% switchers = 23% switchers = 32% repeaters = 23% switchers = 32% 7.36 23 Brand C 14.4 7.36 10.24 32 t(1) switchers = 45% switchers = 23% repeaters = 32% 45 23 32 100

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