Chapter 2. Two different types of snacks became available around the 1930s in the USA Fritos Corn Chips in 1932 and Lays Salted Potato Chips in 1931. They both captivated the consumer markets in slightly different regions. While Fritos were popular across the Southern states, Lays primarily sold in the Southeastern states. As you can imagine, there was some overlap in their market regions and as both companies grew, they started to compete for market shares in other states. Just for the sake of imagination, let us assume that you are a sales manager working for Mr. Dooley (the inventor of Fritos) in the mid-1930s and that you believe that the probability of a customer purchasing a bag of Fritos versus a bag of Lays is based upon the customers most recent purchase in Kansas, where both the companies are planning to expand into. Suppose that the following transition probabilities are observed by your team:

	To
From	Frito's	Lay's
Frito's	0.68	0.32
Lay's	0.42	0.58

1. If a customer who last purchased a bag of Fritos is considered, what is the probability that they purchase Fritos in Period 3?
2. The long-run market share for Fritos in Kansas would be % and for Lays would be %.
3. Suppose that Mr. Dooley wants to launch a special discount campaign such that it would increase the transitional probability from Lays to Fritos from 0.42 to 0.48. What would be the new projected market share for Fritos after the campaign? %