Question: 1 7 - 3 3 . Customers tend to exhibit loyalty to product brands but may be persuaded through clever marketing and advertising to
Customers tend to exhibit loyalty to product brands but may be persuaded through clever marketing and advertising to switch brands. Consider the case of three brands: and C Customer "unyielding" loyalty to a given brand is estimated at giving the competitors only a margin to realize a switch. Competitors launch their advertising campaigns once a year. For brand A customers, the probabilities of switching to brands and are and respectively. Customers of brand are likely to switch to A and with probabilities and respectively. Brand customers can switch to brands A and with equal probabilities.
a Express the situation as a Markov chain.
b In the long run, how much market share will each brand command?
c How long on the average will it take for a brand A customer to switch to brand To brand
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