Dirichlet implications for portfolio management

Driesener, Carl; Rungie, Cam; Wright, Malcolm

doi:10.1002/cb.1996

Cited by 5 publications

(1 citation statement)

References 69 publications

(115 reference statements)

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“…This study extends previous work by Graham and Kennedy (2022) and Dawes et al (2022) examining the buying behaviour of 12,407 continuously reporting households that purchased 853 brands from 56 consumer goods categories in the United Kingdom between 2010 and 2014. We deliberately utilise the same 5‐year period for consistency with the extant research (Dawes et al, 2022; Graham & Kennedy, 2022), which exceeds the normal consumer‐related period (typically 12 months as per Anesbury et al, 2022; Driesener et al, 2022; Naami et al, 2021), and exceeds the anecdotal 3‐year average tenure for brand managers. The longer the period, the more likely that ultra‐light buyers are included in the analysis as a non‐buyer in a 1‐year period could be classified as an ultra‐light buyer in a 5‐year period.…”

Section: Methodsmentioning

confidence: 99%

Valuing the contribution of ultra‐light buyers

Hossain,

Anesbury,

Driesener

et al. 2023

J of Consumer Behaviour

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Ultra‐light buyers, those who, on average, buy a brand once a year or less, are important by number and their contribution to brand purchase occasions. The initial research, however, was limited in scope and did not measure the contribution of these buyers to sales volume or value. By examining over 850 brands in almost 60 categories, we identify that ultra‐lights make up 62% of a brand's buyer base over 5 years and contribute 32% of purchase occasions and 31% of sales volume and value. In line with previous findings that brands with higher loyalty exhibit more repeat purchases and thus fewer ultra‐light buyers and private label brands often exhibit higher than expected loyalty for their market share—we find the prevalence of ultra‐light buyers is higher for national brands than private labels, likely reflecting the higher loyalty often observed for private labels. We also find no difference in ultra‐light buyers' contribution between high and low‐price brands, indicating that price is not a significant factor affecting the contribution of ultra‐light buyers. Finally, we find that both growing and declining brands have fewer ultra‐lights than stable brands. As growth occurs via increasing penetration and loyalty, for growing brands, new buyers may be more ‘light’ than ‘ultra‐light’ in terms of their loyalty; while for declines, these findings imply that there are not enough ultra‐light buyers to maintain brand sales. A failure to recruit ultra‐light buyers may be very dangerous for brand health.

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Section: Methodsmentioning

confidence: 99%

Valuing the contribution of ultra‐light buyers

Hossain,

Anesbury,

Driesener

et al. 2023

J of Consumer Behaviour

Self Cite

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Where is the brand growth potential? An examination of buyer groups

Trinh,

Dawes,

Sharp

2023

Mark Lett

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Practitioners and academics have long discussed strategies for brand sales growth. A recent example is an industry debate in which different brand growth strategies were argued: https://www.mmaglobal.com/thegreatdebate (MMA Global & Neustarr, 2021). A central question in this arena is whether a brand should focus on its heavy, light, or non-buyers in its efforts to grow its sales. This study contributes to our knowledge about how sales growth can occur by investigating the potential contribution these three buyer groups can make to any sales gain. Using both, a simulation study and an empirical study of purchases of approximately 12,400 households in the UK, across different brands and categories, we show that almost any brand’s headroom growth potential lies mostly in light or non-buyers of that brand. Even for large brands with high penetration the growth potential of light brand buyers eclipses heavy brand buyers.

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Factors that influence manufacturer and store brand behavioral loyalty

Dawes

2022

Journal of Retailing and Consumer Services

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Dirichlet implications for portfolio management

Cited by 5 publications

References 69 publications

Valuing the contribution of ultra‐light buyers

Valuing the contribution of ultra‐light buyers

Where is the brand growth potential? An examination of buyer groups

Factors that influence manufacturer and store brand behavioral loyalty

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