Advertising Campaign During an advertising campaign, Pepsi, Coke, and RC cola tried to increase their share
of the area's soda pop market. Prior to the campaign, Pepsi had 30% of all sales, Coke
had 50%, and RC Cola had 20% of all sales.
At the end of the 6 month ad campaign, a telephone survey was conducted, and the
following results were determined:
a) Of the original Pepsi drinkers, 10% switched to Coke, and 15% switched to RC
Cola.
b) of the original Coke drinkers, 12% switched to Pepsi, and 20% now prefer RC
Cola.
c) of the original RC Cola drinkers, 8% switched to Pepsi, and 5% switched to Coke.
Determine the effect of the ad campaign on the market share of Pepsi, Coke, and RC
Cola. In other words, after the 6 months, what percent of sales does each company
have?
Method: Set up a 1x3 matrix representing the original percentages.
Then, set up a 3x3 matrix representing the share of the market lost, or maintained.
Multiply the two matrices. The resulting 1x3 will indicate the new market shares.
Therefore, the following percentages will occur after 6 months.
Pepsi:
Coke:
RC Cola:
If you were to multiply these percentages by the 3x3 matrix again. you would have the
results of the effect of the ad campaign after 1 year. Explain why this would probably
not be accurate,