Ace Motors recently introduced a hybrid automobile named Opus. Since its introdu
ID: 1174522 • Letter: A
Question
Ace Motors recently introduced a hybrid automobile named Opus. Since its introduction, this offering has achieved a 1.2% market share in this market. Ace Motors has conducted research in an effort to assess its opportunity for market share development. The table below indicates consumers' current response at each step along the share performance path for Ace Motors' Opus hybrid automobile as well as the potential performance for each of the share performance metrics:
Share Performance
Metric
Current Performance
Potential Performance
Product Awareness
0.70
0.80
Product Attractiveness
0.45
0.60
Price Acceptable
0.60
0.80
Product Availability
0.55
0.70
Service Experience
0.60
0.75
Answer each question. Include at least a couple sentences of explanation for each one.
1) What is Opus's current market share index?
2) What is Opus's market share potential index?
3) Calculate the share performance gap between the actual and desired customer response.
Share Performance
Metric
Current Performance
Potential Performance
Product Awareness
0.70
0.80
Product Attractiveness
0.45
0.60
Price Acceptable
0.60
0.80
Product Availability
0.55
0.70
Service Experience
0.60
0.75
Explanation / Answer
Soln : 1) Share performance depends upon the given factors, which will decide on the product sales and finally the market share index which is relative to some figure. Here we would multiply the response for each factor to get Current market share index = 0.70*0.45*0.60*0.55*0.60 = 6.24%
2) Similarly we can calculate Opus's market share potential index = 0.80*0.60*0.80*0.70*0.75 = 20.16%,which is ofcourse on a very positive side .
3) Share performave gap between actual and desired (potential) custoer response = gap in the two share index calculated above = 20.16%- 6.24% = 13.92%
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