The purchase patterns for two brands of toothpaste can be expressed as a Markov process with the following transition probabilities:
|
From
|
Special B
|
To
|
MDA
|
|
Special B
|
0.90
|
|
0.10
|
|
MDA
|
0.05
|
|
0.95
|
Suppose that in the above Problem a new toothpaste brand enters the market such that the following transition probabilities exist:
|
From
|
Special B
|
To MDA
|
T-White
|
|
Special B
|
0.80
|
0.10
|
0.10
|
|
MDA
|
0.05
|
0.75
|
0.20
|
|
T-White
|
0.40
|
0.30
|
0.30
|
What are the new long-run market shares? Which brand will suffer most from the introduction of the new brand of toothpaste?