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 407 stalls that she cleans, and Sam's Hayfaring Maneger, that cleans 1,220 stalls. The remainder of the stalls are cleaned by their owners rather than by a service. Allison prices her cleaning services at $8 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 69 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

13.2%

Step-by-step explanation:

Calculation for What is the market penetration rate based on potential customers

Using this formula

Market penetration=Numbers of customers who purchased Allison derived sales and Sam derived sales /Total potential population

Where,

Total potential population=1,500

Allison derived sales = 129 customers

Sam derived sales = 69 customers

Numbers of customers who purchased Allison derived sales and Sam derived sales=129 customers+ 69 customers

Numbers of customers who purchased Allison derived sales and Sam derived sales =198 customers

Let plug in the formula

Market penetration=169 customers/1,500

Market penetration=0.132*100

Market penetration=13.2%

Therefore the market penetration rate based on potential customers will be 13.2%