An Investigation of Variation in Brand Growth and Decline across Categories

Self Cite

This paper investigates consumer's behavioural loyalty to online supermarkets over time. We use three measures of behavioural loyalty (share of category requirements, repertoire size, and polarisation index) from four major online supermarkets in the UK across five categories. We find that loyalty to online supermarkets is high in the categories we examined, though it declined somewhat from 2005 to 2009 and subsequently remained stable from 2010 to 2014. We also extensively test the generalisability of the well-known Dirichlet model to the choice of online supermarkets. We find that the model gives better fit from 2010 to 2014 than from 2005 to 2009 and can describe loyalty and competition in this context.

Section: Discussion Limitations and Future Researchsupporting

confidence: 88%

Has Behavioural Loyalty to Online Supermarkets Declined?

Trinh

Anesbury

Driesener

2017

Self Cite

“…There is now copious evidence that established categories of CPG brands remain in near-equilibrium over time, with little persistent trend in market share (Bass and Pilon, 1980;Dekimpe and Hanssens, 2000). Trinh and Anesbury (2015) found that most categories remain near-stationary even over five years, identifying changes in market share in excess of 3 points up or down for only 14% of brands. Dawes et al (2015) examined loyalty measures (switching, SCR and average repertoire size) in 26 UK and US categories in periods ranging between six and thirteen years and found very little evidence for declining (or, for that matter, increasing) behavioural loyalty.…”

Section: Systematic Dirichlet Deviationsmentioning

confidence: 99%

Making Sense of Common Dirichlet Deviations

Scriven

Bound

Graham

2017

This paper reviews the regularly recurring deviations between buyer behaviour patterns and predictions from the NBD-Dirichlet model. Previous studies have tended to look at one or two Dirichlet Deviations in isolation; the aim here is to learn more about their managerial significance by categorising them according to their behavioural indicators, summarising their incidence and extent and relating them to the implied breaches of assumptions of the model. We replicate prior research results in a single, extensive database of 62 FMCG categories and find that the Dirichlet Deviations take three forms; slight systematic variances in expected metrics across all brands in every fitting, suggesting some failure in stationarity; certain types of persistent deviation for individual brands or groups of brands that indicate partitioning; and those that capture dynamic performance. Analysis shows that consumer purchase propensities are never quite fixed or entirely independent, yet brand performance remains close to Dirichlet prediction. Managers who use this model need to be aware of the strategic options that the deviations imply, and we discuss these. Findings also contribute to the idea that deviations might be reduced by model adaptations although the managerial simplicity of the NBD-Dirichlet sets a major challenge to this.

“…This law has been extensively tested over thirty-five years or more, and rightly so, since it provides a key to the multi-million dollar question of how brands grow. When Double Jeopardy constrains choice behaviour, marketers should know that brand share growth depends on substantially increasing the size of the customer base rather more than on managing customer loyalty (Sharp, 2010; Trinh and Anesbury, 2015).…”

Section: Introductionmentioning

confidence: 99%

Double Jeopardy – 50 Years On. Reviving a Forgotten Tool that Still Predicts Brand Loyalty

Graham

Bennett

Franke

et al. 2017

Scientific knowledge builds by continuously subjecting its known laws to differentiated replications. Empirical generalisations capturing the Law of Double Jeopardy have been extensively tested in this way for decades, and rightly so because they continue to provide a valuable managerial key to the multi-million dollar question of how brands grow. This research continues that work, first by extending knowledge of the operation of Double Jeopardy in the less familiar conditions of long-run continuous buying, emerging markets, capital purchasing and house of brand strategies, and second by validating the rather overlooked w(1- b) approximation as a simple tool to predict behavioural brand loyalty. Observations of competitive brand performance in 32 differentiated replications, some over thirty five years apart, find no boundary condition to the operation of the Double Jeopardy characteristic even in contexts that might initially suggest a challenge to its independence assumptions. We outline the implications for managers in these new findings in terms of insight, planning and brand audit.