The town of Boswell, British Columbia, has two bed and breakfast resorts: Kootenay Rose and Kootenay Lake Lodge. Currently, the Kootenay Rose gets 35% of the town’s bookings, and the Kootenay Lake Lodge gets 65% of the town’s bookings. Each season the two resorts prepare a brochure stressing different aspects of the resort. These include room price, recreational facilities, breakfast quality, and room decor. The following table gives the change in the expected market share of the Kootenay Rose based on its and the Kootenay Lake Lodge’s brochure’s principal focus.
a. Determine the optimal strategy for the Kootenay Rose to use in preparing the principal focus of their advertising brochure.
b. What will be the expected change in the market share for the Kootenay Rose?
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