Benchmarking buyer behavior towards new brands
- PDF / 305,882 Bytes
- 10 Pages / 439.37 x 666.142 pts Page_size
- 101 Downloads / 199 Views
Benchmarking buyer behavior towards new brands Giang Trinh 1 & Jenni Romaniuk 1 & Arry Tanusondjaja 1
# Springer Science+Business Media New York 2015
Abstract New brand launches are risky endeavors for marketers, as many fail to attract a sustainable customer base. This research examines the buying behavior of customers acquired by a new brand and revisits the theoretical norms of the NBD-Dirichlet model benchmarks. Investigating 40 new brand launches in the UK, across a wide range of brand and category conditions, we find that in the first 12 months, new launches have more, but less loyal buyers than expected from NBD-Dirichlet benchmarks, irrespective of type, price point, or the sales gained by the new launch. Further we find exploratory evidence that new buyers of brands have weaker associations than existing buyers. We propose that the combination of the new experience that lacks distinctiveness in encoding means that the experience of buying the new brand creates weaker memory traces in new buyers and that these buyers need additional marketing reinforcement to consolidate the memory of buying the brand to establish the brand in their ongoing repertoire. Keywords New brand launches . Loyalty . NBD-Dirichlet model . Packaged goods
1 Introduction and background In mature consumer packaged good categories, where brands fight for market share, one popular, albeit risky tactic to increase revenue is to introduce a new brand or variant to the portfolio (Castellion and Markham 2012; Crawford
* Giang Trinh [email protected] Jenni Romaniuk [email protected] Arry Tanusondjaja [email protected] 1
Ehrenberg-Bass Institute, The University of South Australia, Level 4, Yungondi Building, North Terrace, Adelaide, SA 5000, Australia
Mark Lett
1977; Tauber 1988). A brand introduction can serve multiple purposes including the following: appealing to variety seeking behavior so that buyers can buy different brands from the same company within their repertoire (Mason and Milne 1994); guarding valuable shelf-space in stores, as retail stores prefer brands with greater variety to increase foot traffic (Bergen et al. 1996; Hubner and Kuhn 2012; Sorensen 2009); and/or to appeal to a new segment of customers and draw them into the company’s portfolio (Kapferer 2012). Many studies focus on forecasting the performance of new launches (e.g., Ataman et al. 2008; Hardie et al. 1998) or measure the success during the new product launch period (e.g., Beard and Easingwood 1996; Hultink et al. 1999). An adjacent stream of research examines the brand metrics underpinning new launches (e.g., Ehrenberg and Goodhardt 2000; Singh et al. 2012; Wright and Sharp 2001). In an exploratory study, Ehrenberg and Goodhardt (2000) compare the quarterly penetration and average purchase frequency of new launches, with similar metrics from established brands, and find strong similarities in these quarterly metrics. Based on these results, Ehrenberg and Goodhardt put forward the theory of new brand
Data Loading...
