Consider the Coffee industry in the United States as described in Exhibit 4.2 of

Question

Consider the Coffee industry in the United States as described in Exhibit 4.2 of your book (p68/70). A competitor of Atlantic Blend, Grounds for Divorce, has a market share that looks somewhat differently. Where 75% of the US market is retail, only 65% of Grounds Sales are retail, but 95% are ground coffee. It is believed that the reason only 50% of sales are caffeinated coffee is because of the institutional nature of Grounds’ customers. Grounds operates only in the New England market which totals $350 million.

Grounds has 50% of the NE market. What is the dollar value of Grounds’ share of the Total US market?

Select one:

a. $108,000,000

b. $761,600,000

c. $250,000,000

d. $175,000,000

Explanation / Answer

Since Ground only operates in New England and has 50% market share there in a market of $350million

so there dollar value is = 50% of $350 million = $175 million

Option d.

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