Question

Allison has a horse stall cleaning business that has been growing rapidly since she started it three years ago. She estimates the total number of horse stalls in her market to be 5000, owned by a total potential population of 1500. Currently, there are only two competitors in the market, Allison, who has 421 stalls that she cleans, and Sam's Hayfaring Maneger, that cleans 1,440 stalls. The remainder of the stalls are cleaned by their owners rather than by a service. Allison prices her cleaning services at $11 per stall per month and Sam charges $8 for the same service. Allison's sales are derived from 129 customers while Sam's are from 54 customers, meaning that Sam's customers have more stalls on a per capita basis. What is the market penetration rate based on potential customers

Answer 1

Answer:

12.2%

Explanation:

The computation of the market penetration rate is shown below:

As we know that

Market penetration rate is

= Customers ÷ total potential population

For Allision, it would be

= 129 ÷ 1,500

= 8.6%

And, for sam it would be

= 54 ÷ 1,500

= 3.6%

So, the total market penetration rate is

= 8.6% + 3.6%

= 12.2%