53 research outputs found
Is Category Expansion a Realistic Long-Term Objective for Established Brands?
How often do established CPG categories expand following a period of stationarity? To what extent can the levers under manufacturer control bring about persistent growth in total category value? The authors explore these questions in order to test the commonly held assertion that brand leaders in established markets can grow sales by expanding total category demand. Findings from a study of US household panel data describing the purchasing of nearly 500 small and large categories by 60,000 households over a nine-year period are presented. The observations focus on the growth impact of three sales levers, category penetration, purchase volume per buyer, and price per volume paid, in various strategic windows ranging from one to nine years.
The results demonstrate that category penetration increase is the most likely lever for category growth. The association between over-time revenue increase and growth in buying household numbers is far stronger than that between unit price increases or category usage. While this clearly indicates a promising strategic direction for brand management, results also carry a health warning: categories are relatively volatile in the short term, but highly stable over time, therefore while the direction is clear the path is very narrow indeed
Marketing research faces two challenges and a world of opportunity with long-term panel data
There have been frequent calls in the literature for a more comprehensive understanding of marketing impact on long-term firm performance (Dawes, Meyer-Waarden, & Driesener, 2015; Hanssens & Pauwels, 2016; Lodish & Mela, 2007; Webster & Lusch, 2013). Retail scanner data has been the principal source of empirical evidence in this strategic domain, but it cannot explain the behavioural shifts that underpin sales dynamics. Now that far larger extended household panels are available, there is, for the first time, a valuable behavioural lens with which to observe long-term brand and category buying. In this paper we outline theoretical and methodological challenges to this new type of panel research. The first concerns an approach to extending established marketing theory to long-run repeat buying; the second relates to the inherent constraints of long-term panels. We present a new research agenda to progress explanatory theories of long-run brand building and category growth in this new but largely untapped resource
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 firmâs 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 goodsâ 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 firmsâ 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
With or without you: consumer acceptance of two national brand portfolio extension options
The aim of this paper is to investigate which portfolio extension option: either a cheaper subbrand or a private label endorsed by the national brand is better from the consumer perspective. Two hypothetical product concepts from a leading beer brand were tested among Dutch consumers. The findings show that consumers are equally likely to try the options and form a positive or negative opinion about the manufacturer after the extension. However, when looking at the ability for a brand to cover a price conscious segment and therefore increase penetration, the cheaper national sub-brand performs better. Given that the manufacturer will be not restricted in distribution of such a brand, our findings are in favour of a cheaper sub-brand rather than an endorsed private label
An Exploration of Consumer Attitudes and Purchasing Patterns in Fair Trade Coffee and Tea
Premiumisation strategy as a way to grow
Explores the myths of premiumisation, adding evidence to the topic by identifying the appropriate growth strategy, as well as how to manage pricing and price promotions for the premium offer.
Premiumisation should be a joint enterprise with channel partners, who should be involved early on, to get both insight and co-operation with the strategy.
Three strategic lenses are considered when determining how to increase average purchase value: within industry, within category and within product format.
A premium brand is not a mainstream brand, and should not be expected to sell volume like a mainstream brand, so consider de-emphasising volume objectives and ensure that whatever you do sell is at your intended price point.
Price promotions are not a good way to attract new buyers.
And there is an alternative way to attract them other than cutting price â advertising, better physical availability or sampling.
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