Table 1 shows quarterly sales for a manufacturer of refillable pens and for the total pen market. The manufacturer has a marketing objective to increase its...
Question 1 Report
Table 1 shows quarterly sales for a manufacturer of refillable pens and for the total pen market. The manufacturer has a marketing objective to increase its share of the market after launching a lower-priced product for school customers.
| Quarter | Manufacturer sales ($) | Total market sales ($) |
|---|---|---|
| Quarter 1 | 180,000 | 1,500,000 |
| Quarter 2 | 234,000 | 1,560,000 |
(a) Show the manufacturer's market share in Quarter 2. [2]
(b) Identify whether its market share increased or decreased between the two quarters. [1]
(c) Explain one reason why market share can be useful when evaluating the success of the new product. [2]
Answer Details
(a)
\[\text{Market share}=\frac{\$234\,000}{\$1\,560\,000}\times100=15\%\]
The manufacturer's Quarter 2 market share is 15%. [2]
(b) Market share increased. In Quarter 1 it was \(\frac{180\,000}{1\,500\,000}\times100=12\%\), so it rose from 12% to 15%. [1]
(c) Market share shows the manufacturer's sales as a proportion of all sales in the market. It helps the manufacturer judge whether the new product is helping it gain customers from competitors, rather than merely benefiting from overall market growth. [2]
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