Answered: Which brand is the most vulnerable,…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Which brand is the most vulnerable, i.e., of which brand consumers are more likely to switch to another brand?

Brand C

Brand B

Brand A

Transcribed Image Text:A marketing manager of brand A investigated historical customer purchases for their own brand and two competing brands (brands B and C), using the following transition matrix: | Brand purchased next time | A | B | C | |---------------------------|-----|-----|-----| | **Brand currently purchased** | | | | | A | 60% | 15% | 25% | | B | 15% | 75% | 10% | | C | 20% | 10% | 70% | **Analysis of the Transition Matrix:** - **Brand A:** 60% of customers continue buying brand A, 15% switch to brand B, and 25% switch to brand C. - **Brand B:** 15% switch to brand A, 75% continue with brand B, and 10% switch to brand C. - **Brand C:** 20% switch to brand A, 10% switch to brand B, and 70% continue with brand C. **Question:** Which brand is the most vulnerable, i.e., of which brand consumers are more likely to switch to another brand? **Explanation:** This matrix helps in understanding customer loyalty and switching behavior. Based on the percentages provided, the vulnerability is indicated by the lower retention rate and higher switch rate to other brands.

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