Last quarter Abingdon Company sold 1,000 decorative decals for $1 each, Cedar Decaliania sold 200 decorative decals at $4 each, Creative Decals sold 500 decals at $2 each, and Donnelly, Inc. sold 300 decals for $4 apiece. Assuming the four companies are the only firms competing in the decorative decal market, calculate unit and dollar market share for each company for last quarter. For each company, which market share figure might be used in an advertisement for that company?
What will be an ideal response?
The following calculation table shows the resultant unit and dollar shares. Market share should be expressed in percentage points. Firms often state market share in terms that are most flattering to the company. Abingdon would express unit shares in an advertisement, while Cedar Decaliania and Donnelly would use dollar shares. Creative Decals's market share is 25 percent for either calculation.
| Company | Units sold | Unit price | Total dollars | Unit market share | Revenue Market Share |
| Abingdon | 1,000 | $1.00 | $1,000 | 1,000/2,000 = 50% | $1,000/$4,000 = 25% |
| Cedar Decaliania | 200 | $4.00 | $ 800 | 200/2,000 = 10% | $ 800/$4,000 = 20% |
| Creative Decals | 500 | $2.00 | $1,000 | 500/2,000 = 25% | $1,000/$4,000 = 25% |
| Donnelly | 300 | $4.00 | $1,200 | 300/2,000 = 15% | $1,200/$4,000 = 30% |
| 2,000 | $4,000 | 100% | 100% | ||
See Exhibit 16.1.
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