The Dirichlet model in marketing

Driesener, Carl; Rungie, Cam

doi:10.1002/cb.1975

Cited by 12 publications

(6 citation statements)

References 112 publications

(154 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It has also been shown to occur across different countries, including the United Kingdom (Ehrenberg, 1988;Graham, 2009), United States (Uncles et al, 1995), New Zealand (Sharp & Sharp, 1997), Australia (Wright et al, 2002), Japan (Fader & Schmittlein, 1993), Italy (Corsi et al, 2011), Greece (Krystallis & Chrysochou, 2010), China (Uncles et al, 2010) and the Netherlands (Barker, 2021). The Dirichlet model has been referred to as a 'True Scientific Law' due to its success in modelling behaviour in so many markets, categories and times (Driesener & Rungie, 2021). If it holds for online fashion brands on eBay, a new type of category will be added and this should encourage future research on its applicability to other categories.…”

mentioning

confidence: 99%

Using the Dirichlet model to predict how fashion brands compete and grow on eBay

Chowdhury

Barker

Trinh

et al. 2021

J of Consumer Behaviour

View full text Add to dashboard Cite

E-fashion brand competition has historically been studied from an attitudinal lens, through surveys and theory-based approaches. These studies generally examine consumer attitudes, satisfaction and loyalty; highlighting that trust, satisfaction and reputation are key e-commerce success elements. However, the empirical consumer behaviour literature rebuts the use of attitudes to explain brand performance, criticising their subjectivity and the overall ineffectiveness of loyalty as a brand growth tool. The article presents Gerald Goodhardt and colleagues' Dirichlet model as an alternative approach to understanding e-fashion buyer behaviour. The Dirichlet model is a robust, stochastic model that has reliably predicted well-established lawlike patterns of buyer behaviour and brand competition. We apply Dirichlet modelling to a new, non-fast moving consumer goods category to extend consumer behaviour research in the online environment. The study uses consumer panel data from the United Kingdom, across two consecutive years. We conclude that the Dirichlet model has an excellent fit within the eBay fashion brand market. The study also identifies that the well-known double jeopardy pattern exists within this market, demonstrating that e-fashion brands grow through acquisition rather than retention of customers. This provides a different viewpoint than most e-fashion brand growth literature. In addition to this, we examine the predictive capability of the Dirichlet model. We use a holdout sample to show that the model can predict future brand performance metrics, which is an exciting new development in consumer behaviour research.

show abstract

mentioning

confidence: 99%

Using the Dirichlet model to predict how fashion brands compete and grow on eBay

Chowdhury

Barker

Trinh

et al. 2021

J of Consumer Behaviour

View full text Add to dashboard Cite

show abstract

“…Split loyalty to multiple brands in repertoire markets has been called "polygamous loyalty" (Dowling and Uncles, 1997;Sharp et al, 2002). Consumers are polygamously loyal to brands within their own personal repertoires and purchase from them at a relatively constant rate over the short to medium term (Driesener and Rungie, 2022). Having a repertoire helps simplify the otherwise high cognitive load task of choosing from many alternatives (Banelis et al, 2013;Ehrenberg et al, 2004).…”

Section: Behavioural Differences In Subscription Marketsmentioning

confidence: 99%

Understanding consumer behaviour in evolving subscription markets – lessons from sports season tickets research

McDonald,

Dunn,

Schreyer

et al. 2023

JOSM

View full text Add to dashboard Cite

PurposeThe purpose is to review literature on sports season ticket subscriptions to distil current knowledge and guide future research and practice.Design/methodology/approachA systematic literature review is conducted of research on sports season tickets, a long-established and innovative subscription category.FindingsIn-depth examination of 28 papers showed a focus on drivers of satisfaction, churn and renewal causes, and product utilisation rates. Subscription markets typically involve many “solely loyal” consumers, most purchasing one or two subscriptions in a category. From reduced barriers to entry and exit to “curated” subscriptions, subscription marketing is changing very quickly. Sports marketers build relationships with subscribers using behavioural data, tier benefits to distinguish between casual and subscribing customers, and create recall and scarcity around key aspects of subscription to combat churn and increase utilisation.Research limitations/implicationsScarce research on subscription marketing practices remains the primary limitation. Existing research suggests that strong connections between subscriber and organisation, heavy product utilisation and/or strong barriers to switching drive customer satisfaction and retention.Practical implicationsRapid expansion of subscription products should reduce “excess loyalty”, meaning that subscription models' main benefit will be limited to reoccurring revenue. Exceptions occur when consumers are heavily connected to the product or have little provider choice, so allocate their category buying exclusively. New subscription products face myriad challenges. Guidance on effective subscription marketing from sports marketing research and practice is outlined.Originality/valueBy combining research on market structure, marketing empirical generalisations and subscription marketing, this paper guides future research and practice.

show abstract

“…Second, an expected level of customer sharing with competitors derives from the law against which actual sharing can be compared (Anesbury et al, 2021; Ehrenberg et al, 2004; Sjostrom et al, 2014; Wilson & Winchester, 2019). Originating from media audience research (e.g., Agostini, 1961; Chatfield & Goodhardt, 1975; Driesener & Rungie, 2022; Goodhardt, 1966; Naami et al, 2021; Winchester & Lees, 2013), the number of viewers that watch any program pair is predicated on the latter program's audience size (Goodhardt & Ehrenberg, 1969). This pattern also exists when examining television programs and channels (Collins et al, 2003) and radio (Lees & Wright, 2013).…”

Section: Background and Research Questionsmentioning

confidence: 99%

“…To understand how music competes, we turn to the fitted Negative Binomial Distribution (NBD)‐Dirichlet and its outputs. The fitted NDB‐Dirichlet, a zero‐order model of competitive market structure, is known to fit many competitive contexts (Driesener et al, 2017; Driesener & Rungie, 2022). One of the outputs of this model is benchmarks for observed sharing of customers between brands, known as Duplication of Purchase.…”

Section: Introductionmentioning

confidence: 99%

Death by 1000 ‘true fans’: Do marketing laws apply to music listening?

Anesbury

Davies

Driesener

et al. 2022

J of Consumer Behaviour

Self Cite

View full text Add to dashboard Cite

The advice to musicians and marketers is to focus on what they love: a truism for practitioners is to find 1000 'true fans' and make $100 from each of them (Kelly, 2008. 1000 True fans. The Technium). If this advice is correct, we should see musicians with loyal user bases engaging more with their favourite artists and less with other music, suggesting a narrow targeting strategy would suffice. On the other hand, the established marketing laws indicate that the listeners of very different genres should overlap more than conventional wisdom would suggest, supporting the need for a much broader approach to targeting potential audiences. Given these conflicting views, musicians need to know if they should market to their existing listeners, the listeners of music similar to theirs (i.e., the same genre), or if they should try to reach a much wider audience. We turn to established choice patterns from the marketing literature to address these questions in the music context. This study examines 84,000,000 observations of music listening from 27,000 unique global users between 2013 and 2014 and survey data from 2019 containing music listening from over 1000 representative respondents in the United States. The results show that listening follows the Duplication of Purchase law for genres, artists, albums, and songs, at an annual, 6-months, 3-months, 1-month, and 1-week period, with no indication of partitioned music listening. The implication is that musicians should try to reach all potential listeners, regardless of what they already listen to. These findings contribute to the theoretical knowledge about duplication analyses of various durations, extend the contexts of choice behaviour that exhibit this pattern, and managerially, to knowledge about the extent of potential audiences and 'share of ear' competition. | INTRODUCTIONMusic listening is a popular and prevalent human choice activity. Americans spend about 32 h a week, or four-and-a-half hours a day, listening to music (Nielsen, 2017). There are over 250 million paid music streaming service subscribers, accounting for 37% of the US$19B industry (International Federation of the Phonographic Industry, 2019). Streaming technologies provide unprecedented access to millions of songs (Krause et al., 2015), making finding music a potentially overwhelming choice. Record companies invest at least US$5.8B annually on new artist scouting and marketing activities (International Federation of the Phonographic Industry, 2019).

show abstract

The Dirichlet model in marketing

Cited by 12 publications

References 112 publications

Using the Dirichlet model to predict how fashion brands compete and grow on eBay

Using the Dirichlet model to predict how fashion brands compete and grow on eBay

Understanding consumer behaviour in evolving subscription markets – lessons from sports season tickets research

Death by 1000 ‘true fans’: Do marketing laws apply to music listening?

Contact Info

Product

Resources

About