IDEAS home Printed from https://ideas.repec.org/a/kap/mktlet/v35y2024i1d10.1007_s11002-023-09682-7.html
   My bibliography  Save this article

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

Author

Listed:
  • Giang Tue Trinh

    (University of South Australia)

  • John Dawes

    (University of South Australia)

  • Byron Sharp

    (University of South Australia)

Abstract

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.

Suggested Citation

  • Giang Tue Trinh & John Dawes & Byron Sharp, 2024. "Where is the brand growth potential? An examination of buyer groups," Marketing Letters, Springer, vol. 35(1), pages 95-106, March.
    • Handle: RePEc:kap:mktlet:v:35:y:2024:i:1:d:10.1007_s11002-023-09682-7
    DOI: 10.1007/s11002-023-09682-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11002-023-09682-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11002-023-09682-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David C. Schmittlein & Albert C. Bemmaor & Donald G. Morrison, 1985. "Technical Note—Why Does the NBD Model Work? Robustness in Representing Product Purchases, Brand Purchases and Imperfectly Recorded Purchases," Marketing Science, INFORMS, vol. 4(3), pages 255-266.
    2. Trinh, Giang & Lam, Desmond, 2016. "Understanding the attendance at cultural venues and events with stochastic preference models," Journal of Business Research, Elsevier, vol. 69(9), pages 3538-3544.
    3. Debanjan Mitra & Peter N. Golder, 2006. "How Does Objective Quality Affect Perceived Quality? Short-Term Effects, Long-Term Effects, and Asymmetries," Marketing Science, INFORMS, vol. 25(3), pages 230-247, 05-06.
    4. Martin, James & Nenycz-Thiel, Magda & Dawes, John & Tanusondjaja, Arry & Cohen, Justin & McColl, Bruce & Trinh, Giang, 2020. "Fundamental basket size patterns and their relation to retailer performance," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    5. Mark Uncles & Andrew Ehrenberg & Kathy Hammond, 1995. "Patterns of Buyer Behavior: Regularities, Models, and Extensions," Marketing Science, INFORMS, vol. 14(3_supplem), pages 71-78.
    6. Baker, Bradley J. & McDonald, Heath & Funk, Daniel C., 2016. "The uniqueness of sport: Testing against marketing's empirical laws," Sport Management Review, Elsevier, vol. 19(4), pages 378-390.
    7. Gauthier Casteran & Polymeros Chrysochou & Lars Meyer-Waarden, 2019. "Brand loyalty evolution and the impact of category characteristics," Marketing Letters, Springer, vol. 30(1), pages 57-73, March.
    8. Trinh, Giang & Corsi, Armando & Lockshin, Larry, 2019. "How country of origins of food products compete and grow," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 231-241.
    9. Morrison, Donald G & Schmittlein, David C, 1988. "Generalizing the NBD Model for Customer Purchases: What Are the Implications and Is It Worth the Effort?," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(2), pages 145-159, April.
    10. Daniel M. McCarthy & Russell S. Winer, 2019. "The Pareto rule in marketing revisited: is it 80/20 or 70/20?," Marketing Letters, Springer, vol. 30(2), pages 139-150, June.
    11. Desmond Lam & Richard Mizerski, 2009. "An investigation into gambling purchases using the NBD and NBD–Dirichlet models," Marketing Letters, Springer, vol. 20(3), pages 263-276, September.
    12. Ehrenberg, Andrew S. C. & Uncles, Mark D. & Goodhardt, Gerald J., 2004. "Understanding brand performance measures: using Dirichlet benchmarks," Journal of Business Research, Elsevier, vol. 57(12), pages 1307-1325, December.
    13. Philip Stern & Kathy Hammond, 2004. "The Relationship Between Customer Loyalty and Purchase Incidence," Marketing Letters, Springer, vol. 15(1), pages 5-19, February.
    14. Bradley J. Baker & Heath McDonald & Daniel C. Funk, 2016. "The uniqueness of sport: Testing against marketing's empirical laws," Sport Management Review, Taylor & Francis Journals, vol. 19(4), pages 378-390, October.
    15. Baek Jung Kim & Vishal Singh & Russell S. Winer, 2017. "The Pareto rule for frequently purchased packaged goods: an empirical generalization," Marketing Letters, Springer, vol. 28(4), pages 491-507, December.
    16. Riebe, Erica & Wright, Malcolm & Stern, Philip & Sharp, Byron, 2014. "How to grow a brand: Retain or acquire customers?," Journal of Business Research, Elsevier, vol. 67(5), pages 990-997.
    17. Marnik G. Dekimpe & Dominique M. Hanssens, 1995. "Empirical Generalizations About Market Evolution and Stationarity," Marketing Science, INFORMS, vol. 14(3_supplem), pages 109-121.
    18. Morrison, Donald G & Schmittlein, David C, 1988. "Generalizing the NBD Model for Customer Purchases: What Are the Implications and Is It Worth the Effort? Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(2), pages 165-166, April.
    19. Trinh, Giang & Dawes, John, 2020. "A comparison of brand loyalty between on the go and take-home consumption purchases," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    20. Giang Trinh & Jenni Romaniuk & Arry Tanusondjaja, 2016. "Benchmarking buyer behavior towards new brands," Marketing Letters, Springer, vol. 27(4), pages 743-752, December.
    21. David C. Schmittlein & Lee G. Cooper & Donald G. Morrison, 1993. "Truth in Concentration in the Land of (80/20) Laws," Marketing Science, INFORMS, vol. 12(2), pages 167-183.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anesbury, Zachary William & Talbot, Danielle & Day, Chanel Andrea & Bogomolov, Tim & Bogomolova, Svetlana, 2020. "The fallacy of the heavy buyer: Exploring purchasing frequencies of fresh fruit and vegetable categories," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    2. Trinh, Giang & Corsi, Armando & Lockshin, Larry, 2019. "How country of origins of food products compete and grow," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 231-241.
    3. Trinh, Giang & Wright, Malcolm J., 2022. "Predicting future consumer purchases in grocery retailing with the condensed Poisson lognormal model," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    4. Trinh, Giang & Lam, Desmond, 2016. "Understanding the attendance at cultural venues and events with stochastic preference models," Journal of Business Research, Elsevier, vol. 69(9), pages 3538-3544.
    5. Trinh, Giang & Khan, Huda & Lockshin, Larry, 2020. "Purchasing behaviour of ethnicities: Are they different?," International Business Review, Elsevier, vol. 29(4).
    6. Mizerski, Richard & Mizerski, Katherine & Lam, Desmond & Lee, Alvin, 2013. "Gamblers' habit," Journal of Business Research, Elsevier, vol. 66(9), pages 1605-1611.
    7. Sharp, Byron & Dawes, John & Victory, Kirsten, 2024. "The market-based assets theory of brand competition," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    8. Zhiqiang (Eric) Zheng & Peter Fader & Balaji Padmanabhan, 2012. "From Business Intelligence to Competitive Intelligence: Inferring Competitive Measures Using Augmented Site-Centric Data," Information Systems Research, INFORMS, vol. 23(3-part-1), pages 698-720, September.
    9. Bogomolova, Svetlana & Anesbury, Zachary & Lockshin, Larry & Kapulski, Natasha & Bogomolov, Tim, 2019. "Exploring the incidence and antecedents of buying an FMCG brand and UPC for the first time," Journal of Retailing and Consumer Services, Elsevier, vol. 46(C), pages 121-129.
    10. Ehrenberg, Andrew S. C. & Uncles, Mark D. & Goodhardt, Gerald J., 2004. "Understanding brand performance measures: using Dirichlet benchmarks," Journal of Business Research, Elsevier, vol. 57(12), pages 1307-1325, December.
    11. Desmond Lam & Richard Mizerski, 2009. "An investigation into gambling purchases using the NBD and NBD–Dirichlet models," Marketing Letters, Springer, vol. 20(3), pages 263-276, September.
    12. Nenycz-Thiel, Magda & Beal, Virginia & Ludwichowska, Gosia & Romaniuk, Jenni, 2013. "Investigating the accuracy of self-reports of brand usage behavior," Journal of Business Research, Elsevier, vol. 66(2), pages 224-232.
    13. Giang Trinh & Cam Rungie & Malcolm Wright & Carl Driesener & John Dawes, 2014. "Predicting future purchases with the Poisson log-normal model," Marketing Letters, Springer, vol. 25(2), pages 219-234, June.
    14. Martin, James & Nenycz-Thiel, Magda & Dawes, John & Tanusondjaja, Arry & Cohen, Justin & McColl, Bruce & Trinh, Giang, 2020. "Fundamental basket size patterns and their relation to retailer performance," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    15. Park, Chang Hee & Park, Young-Hoon & Schweidel, David A., 2014. "A multi-category customer base analysis," International Journal of Research in Marketing, Elsevier, vol. 31(3), pages 266-279.
    16. Trinh, Giang & Dawes, John, 2020. "A comparison of brand loyalty between on the go and take-home consumption purchases," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    17. Mayukh Dass & Masoud Moradi & Fereshteh Zihagh, 2023. "Forecasting purchase rates of new products introduced in existing categories," Journal of Marketing Analytics, Palgrave Macmillan, vol. 11(3), pages 385-408, September.
    18. Koll, Oliver & Plank, Andreas, 2022. "Do shoppers choose the same brand on the next trip when facing the same context? An empirical investigation in FMCG retailing," Journal of Retailing, Elsevier, vol. 98(4), pages 576-592.
    19. Mecredy, Philip & Wright, Malcolm J. & Feetham, Pamela, 2018. "Are promoters valuable customers? An application of the net promoter scale to predict future customer spend," Australasian marketing journal, Elsevier, vol. 26(1), pages 3-9.
    20. Vipul Pare & John Dawes, 2012. "The persistence of excess brand loyalty over multiple years," Marketing Letters, Springer, vol. 23(1), pages 163-175, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:mktlet:v:35:y:2024:i:1:d:10.1007_s11002-023-09682-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.