A rising tide lifts all boats: The role of share and category changes in managing organic sales growth
The strategic objective of marketing activities is to drive business growth by promoting the firm’s products. Beyond merger and acquisition, organic growth can be targeted from two sources: Market Share Gain and Category Growth. Market share is often the focus for corporate objectives and used as a success measure. This research explores the relative impact of these two elements on firm growth across product category and addresses whether market share should be the main focus for all organisations. The study covers 39 consumer packaged goods’ categories from the UK and US, across 189 manufacturers over three to five years of data, post-2010. We show that firm growth through market share gain is likely to benefit small firms, and large firms’ growth is likely to be driven by category growth. The results provide empirical support in the area of business growth and how marketing plays a crucial role in this pursuit.
CitationTanusondjaja, A., Graham, C., Dunn, S., Nenycz-Thiel, M., McColl, B. (2020) "A rising tide lifts all boats: The role of share and category changes in managing organic sales growth". Forthcoming in the Journal of Strategic Marketing.
How wine is really purchased? A systematic multi-country, multi-panel analysis
It is often believed that the way consumers purchase wine differs from the way they purchase other fast-moving consumer goods (FMCG). This review tests this claim by summarising over 15 years of investigation of actual consumer purchases of wine in Australia, Belgium, Italy, Germany, France, the UK and the US, in both the off-trade and online markets. The observed levels of penetration and purchase frequencies are benchmarked against the respective theoretical values one would expect to find in a perfect Dirichlet world. The results disprove the common belief and provide academics and brand managers with a series of evidence-based implications, which they can use to develop efficient marketing strategies.
CitationCorsi, A. M., Remaud, H. (2020). "How wine is really purchased? A systematic multi-country, multi-panel analysis". Forthcoming in sciencedirect.com.
The Natural Monopoly effect in brand purchasing: do big brands really appeal to lighter category buyers?
This paper investigates the Natural Monopoly effect, which is that large brands have buyers who are on average less frequent or ‘lighter’ purchasers of the product category. The study analyzes the NM effect for brands in 28 consumer goods categories in The Netherlands. The analysis employs a multiple regression with category purchase rate as the dependent variable; and brand penetration, together with brand price, brand type, average pack size and promotion incidence as independent variables. The study finds that higher brand penetration is indeed associated with a lower rate of category purchase, controlling for the other variables in the model. The NM effect is reasonably large: the largest two brands in a category tend to have a buyer base that on average purchase the category about 25% less frequently than those of the smallest two. The study also derives an explanation for how large brands are generally purchased more frequently, even when their buyer base on average buys the category less frequently. The findings imply that a focus on heavy category buyers is inconsistent with the goal of growing a brand.
CitationDawes, J. (2020). "The Natural Monopoly effect in brand purchasing: do big brands really appeal to lighter category buyers?". Forthcoming in the Australian Marketing Journal.
The fallacy of the heavy buyer: exploring purchasing frequencies of fresh fruit and vegetable categories
‘Avocado lover,’ ‘banana lover,’ or ‘berry lover’ – these words are starting to dominate the contemporary marketing campaigns for fresh fruit and vegetable categories. Such campaigns assume that there are sizable buyer segments who purchase a particular fresh category more frequently, who are contributing a larger proportion of sales, and who will continue to do so into the future. Yet, an established body of empirical evidence from consumer packaged goods (CPG) categories suggests that these assumptions could be false. The current study empirically examines fresh category purchasing behavior (through a large Nielsen US panel data) by applying three known models: the Negative Binomial Distribution, the Pareto share, and the stability over time analysis (buyers and sales contribution). This study compares the results and finds that despite many differences between fresh and CPG categories, buyers’ purchasing behavior follows the same established benchmarks patterns as those observed in CPG contexts. There are many more infrequent or light buyers than heavy ‘lovers’; the heavy buyers contribute roughly 60% of sales; they are purchasing less frequently, and contributing fewer sales as time goes by. These findings carry important implications for marketers, retailers, and farmers of fresh categories. Specifically, the results show which marketing campaigns (i.e., those highly targeted at ‘lovers’ or those with a mass marketing appeal) are better grounded in the empirical evidence about buyer behavior which has the highest probability of increasing consumption.
Citation"The fallacy of the heavy buyer: exploring purchasing frequencies of fresh fruit and vegetable categories", Anesbury, Z., Talbot, D., Day, C., Bogomolov, T., & Bogomolova, S., Forthcoming in Journal of Retailing and Consumer Services 2019
A comparison of brand loyalty between on the go and take-home consumption purchases
This paper compares consumer brand purchase loyalty for food products bought either ‘on the go’ (OTG), or for take-home consumption. The study uses two UK consumer packaged goods datasets. The first dataset comprises consumers’ purchasing of brands in three product categories: soft drinks, crisps, and savory snacks for on the go consumption. The second contains consumers’ purchasing of the same brands for take-home consumption. Analysis uses the polarization index as a behavioral loyalty measure, estimated from the Beta Binomial – Negative Binomial Distribution. This measure controls for the difference in purchase rate and brand market share across on the go and take-home. The study finds that consumer loyalty to brands is markedly higher in purchasing for on the go consumption than for take-home consumption; and that the effect is even stronger for larger brands in on the go.
CitationTrinh, G. and Dawes, J. (2019) "A comparison of brand loyalty between on the go and take-home consumption purchases". Forthcoming in the Journal of Retailing and Consumer Services.
Physical Activity Competition: a cross-disciplinary application of the Duplication of Behaviour Law
Despite the ongoing promotion of physical activity, the rates of physical inactivity remain high. Drawing on established methods of analysing consumer behaviour, this study seeks to understand how physical activity competes for finite time in a day – how Exercise and Sport compete with other everyday behaviours, and how engagement in physical activity is shared across Exercise and Sport activities. As targeted efforts are common in physical activity intervention and promotion, the existence of segmentation is also explored.
CitationWilson, A.L., Nguyen, C., Bogomolova, S., Sharp, B., Olds, T. "Physical Activity Competition: a cross-disciplinary application of the Duplication of Behaviour Law". Forthcoming in the International Journal of Behavioural Nutrition and Physical Activity.
Examining older consumers’ loyalty towards older brands in grocery retailing
This paper compares the buying behaviours of older and younger consumers of older and newer brands in grocery retailing. We analysed 88,000 purchases of 60 brands from six categories. Behavioural loyalty measures for different consumer age cohorts were calculated and compared relative to each brand’s launch date. Results showed older consumers do not buy older brands more often than newer brands. Older consumers also do not principally buy older brands. Therefore, brands of all ages compete for consumers of all ages. Findings indicate that for newer brands, older consumers should not be ignored as a market for growing the brand. For older brands, despite the default advantage of long-term exposure of older consumers, such advantage will fade if these brands fail to maintain a competitive presence in the market, as older consumers trial and become loyal to newer brands.
CitationPhua, P., Kennedy, R., Trinh, G., Page, B., Hartnett, N. (2019) "Examining older consumers’ loyalty towards older brands in grocery retailing". Forthcoming in the Journal of Retailing and Consumer Services.
Marketing is Scrambled: All Evidence-Based Theorists are Invited to Breakfast
Shaw and Nowicki (2018) mistakenly suggests that the growing adoption of empirical science by marketing academics and practitioners is a return to an earlier time of treating all customers the same. Fundamental patterns discovered in buying and brand performance data accurately describe differences between buyers (e.g. in category buying rates and in personal brand loyalties), as well as predictable differences in loyalty metrics between rival brands. Theory has been proposed that fits these empirical generalisations; that rival brands largely differ and compete in terms of their mental and physical availability to category buyers (Sharp 2010). An implication is that marketers need to understand the differences between buyers in their category so that they can extend their brand’s reach. This contrasts the practice of offering a single marketing mix to the whole market, and it is opposite to the practice of targeting a brand to a single homogeneous segment of the market and again offering a single marketing mix to that segment.
CitationKennedy, R. and Hartnett, N. (2018) "Marketing is Scrambled: All Evidence-Based Theorists are Invited to Breakfast". Accepted for Australasian Marketing Journal, Issue 4 2018.
Modeling Brand Market Share Change in Emerging Markets
The objective of the paper is to examine what happens to key brand performance metrics as brands change in market share, in the context of packaged goods. The metrics are: penetration - the number of buyers a brand has; and loyalty - measured as purchase frequency (PF) and share of category requirements (SCR).
The study utilizes 24 datasets in 17 packaged goods categories in three emerging markets: China, Malaysia and Indonesia. We examine changes in penetration, loyalty and share of category requirements in the context of volume and value market share change. In addition, we examine whether initial price point and price movements influence the results.
The primary finding is that market share change is accompanied by a greater change in penetration than in any other metric. This finding is very consistent across categories and countries. The relative importance of the two loyalty metrics varies by country. SCR was a stronger factor in Indonesia; while PF was stronger in Malaysia. Analysis indicated that pricing strategy (initial price and promotional depth) did not alter the main pattern of results, suggesting the results hold for brands with different price levels and tactics.
Irrespective of circumstance, to grow in value or volume market share, brands should aim to grow in penetration, while the importance of changes in specific loyalty measures depends on market conditions.
This research extends past research on brand growth to the very different economic, geographic and cultural conditions of three crucially important emerging markets. Its main value lies in recommendations on how much to invest in building the size of the customer base versus consumer retention.
CitationRomaniuk, J., Dawes, J., Nenycz-Thiel, M. (2018). "Modeling Brand Market Share Change in Emerging Markets". Forthcoming in the International Marketing Review.
What can the brand manager expect from Facebook?
Managers cannot afford to ignore social media and have stepped up their involvement in the belief that social media activities extend the brand’s reach and engagement with consumers. Facebook is the preeminent social medium with an ever increasing branded content. One hundred brands selected from the Interbrand “Best Global Brand Report” form the basis of this study to test research propositions about the ability of branded Facebook pages to expand and engage users. Data captured from branded Facebook pages was supplemented with socialbaker’s data. No correlation is found between the size of a brand and the number of Facebook fans, and there is no consistent relationship with user engagement and brand size.
The authors discuss broadening reach, improving engagement, interaction and activity and the implications for social media strategies and make recommendations for managing Facebook presence. Paid advertising is required to increase brand reach to all potential category users.
CitationSitta, D., Faulkner, M., Stern, P. (2018). "What can the brand manager expect from Facebook?". Forthcoming in the Australasian Marketing Journal.