Bottled water is a hot industry with sales of $10.510.5 billion in the United St

Question

Bottled water is a hot industry with sales of $10.510.5 billion in the United States. Big players in this industry include Nestle, PepsiCo, and Coca-Cola. Nestle is the market leader with four brands among the top 10 leading brands. Nestle's Pure Life brand was the top-selling brand with sales of $1.311.31billion, but the company's other brands make up an additional $1.31.3 billion. Nestle saw an opportunity in this market and launched a new brand called Resource, targeted to affluent women. Resource is fortified with electrolytes and is promoted as "more than hydration, it's total electrolytenment." Nestle is attempting to take market share away from Glaceau's Vitaminwater and Smartwater. If Resource attains just 55 percent market share, it will be among the top 10 selling brands. How much revenue does one market share point represent in this industry? Assuming total market sales remain the same, what sales must Resource attain to be among the top 10 selling brands?

Explanation / Answer

Answer

Total Sales available in the Bottle water in US = $ 10.5 Billion

Nestle is the top brand in the US market with multiple brands

Nestle Pure Brand sale in US = $ 1.31 billions

Nestle other brands sale in US = $1.31 billions   

Then Remaining total sale in US = Total sale – sum of total sale of Nestle’s Brands

                                                            = $ 10.50 – $ 2.52 = $ 7.98Billions

Nestle’s resource can be top brand , if it takes 55% of sale’s of remaining sale (i.e.$ 7.98)

Nestle Resource ‘s sale could be = 55% * $7.98 = $ 4.33 Billions

So for Resource to be in top 10 leading of market share = its market share should be $ 4.33 billion or more.

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