An Application of Markovian Brand Switching Model to Develop Marketing Strategies in Sunscreen Market with Special Emphasis on the Determination of Long Run Steady State Market Shares

Abstract

Data related to the current brands of sunscreen purchased by the customers of North 24 Paraganas districts of West Bengal in India and the possible sunscreen brands to be purchased by them in their next purchase have been collected by questionnaire method. The questionnaire served to the sample of customers had several questions related to their perceptions and ratings of different sunscreen brands, frequency of usages etc., besides their demographic characteristics. Using the data thus obtained a one-step transition probability matrix has been designed/determined. The present market shares of different brands have been estimated. Using Markovian steady state equations, the steady state probabilities of the different brands have been finally determined. These probabilities give us an idea about the predicted long run market shares of those different brands of sunscreen in the market mentioned above. Also, an effort has been made so that these brands can identify their potential competitors to whom they can lose their market shares, as well as the competitors from whom they can win back customers. Accordingly, they can decide on their strategies.

Keywords: Brand Switching, Markov Chain, Sunscreen, Market Share, Steady State

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