Australasian Marketing Journal

We analyse the purchasing of brands at both regular and promotional price over time. The goal is to better understand the extent of consumer deal-proneness. Our analysis shows most consumers buy brands on promotion at least some of the time, and the tendency to buy on promotion relates mostly to how much promotion is available in a category, suggesting little innate deal-proneness. The extent of promotion can be so high that as many as half of all brand buyers buy the brand solely when it is on promotion. However, this amount of on-deal buying is only very slightly higher than would be expected given the amount of promotion available. We find few buyers buy only on promotion. Promotion buyers of a particular brand also buy other brands on and off promotion more or less in line with the market share those other brands have at regular and promotional price. The three main implications are: (1) brand loyalty is still an important aspect of purchase, (2) a brand's normal-price buyers are a major source of its volume from price promotions, and (3) there is only a small effect of deal-proneness on promotion buying over and above that of promotion prevalence in a category.

Double Jeopardy describes how smaller brands lose twice; they have fewer buyers who are slightly less loyal. A common loyalty measure is how often people buy the brand in a given time period. An alternative loyalty measure is how much people spend, which reflects purchase frequency and price paid. The brand equity literature suggests that high equity brands should reap high purchase rates and high prices. It is therefore possible that Double Jeopardy might become obscured when using a revenue-based measure such as spend per buyer. The reason is that price variation could create more, and more pronounced deviations from the Double Jeopardy pattern. We demonstrate that Double Jeopardy holds for spend in thirteen consumer goods categories: smaller brands have fewer buyers who spend somewhat less on the brand. We further find no relationship between brand share and average price and no relationship between excess/deficit loyalty and average price.

This research examines the relationship between the average price paid by a household for consumer packaged goods and different types of households. Using panel data that consists of approximately 17,000 households per year, we examine 24 consumer packaged goods categories across 6 years (2005–2010) to understand the way in which average purchasing price varies across five key household types or stages, and to highlight generalizability. We find systematic patterns with respect to average price paid as households pass through key household stages. The changes follow an S-shape pattern across multiple product categories. The average purchasing price declines as households move from the pre-family stage to the young family stage, increases at the older family and post-family stages, and then decreases slightly at the single elderly stage. Overall, the most significant change is from the pre-family stage to the young family stage, followed by the change from the older family stage to the post-family stage. The differences hold across multiple years. The effects, however, are larger for nonfood than for food categories. Our results suggest that in order to broaden the brand customer base, brand managers need to have a product portfolio that includes both low and high price variants as well as presence across different distribution channels to satisfy the need of different types of households.

Scientific knowledge builds by continuously subjecting its known laws to differentiated replications. Empirical generalisations capturing the Law of Double Jeopardy have been extensively tested in this way for decades, and rightly so because they continue to provide a valuable managerial key to the multi-million dollar question of how brands grow. This research continues that work, first by extending knowledge of the operation of Double Jeopardy in the less familiar conditions of long-run continuous buying, emerging markets, capital purchasing and house of brand strategies, and second by validating the rather overlooked w(1-b) approximation as a simple tool to predict behavioural brand loyalty. Observations of competitive brand performance in 32 differentiated replications, some over thirty five years apart, find no boundary condition to the operation of the Double Jeopardy characteristic even in contexts that might initially suggest a challenge to its independence assumptions. We outline the implications for managers in these new findings in terms of insight, planning and brand audit.

The Dirichlet model is an empirical generalization describing and predicting repeated choice amongst a set of competitive alternatives. With the advent of big data, there are many new potential applications for this model. Its developers emphasized one goodness-of-fit statistic, and subsequent researchers have used this along with others. There is, however, no consensus in the literature regarding which measures to use or, more importantly, benchmarks. This paper proposes a suite of six goodness-of-fit statistics developed from the literature to assess the fit of the model and develops two new measures that account for category specific factors enabling the development of benchmarks. It also provides appropriate benchmarks for all statistics derived from 54 FMCG categories in the UK.

This paper reviews the regularly recurring deviations between buyer behaviour patterns and predictions from the NBD-Dirichlet model. Previous studies have tended to look at one or two Dirichlet Deviations in isolation; the aim here is to learn more about their managerial significance by categorising them according to their behavioural indicators, summarising their incidence and extent and relating them to the implied breaches of assumptions of the model. We replicate prior research results in a single, extensive database of 62 FMCG categories and find that the Dirichlet Deviations take three forms; slight systematic variances in expected metrics across all brands in every fitting, suggesting some failure in stationarity; certain types of persistent deviation for individual brands or groups of brands that indicate partitioning; and those that capture dynamic performance. Analysis shows that consumer purchase propensities are never quite fixed or entirely independent, yet brand performance remains close to Dirichlet prediction. Managers who use this model need to be aware of the strategic options that the deviations imply, and we discuss these. Findings also contribute to the idea that deviations might be reduced by model adaptations although the managerial simplicity of the NBD-Dirichlet sets a major challenge to this.

The Natural Monopoly is a robust empirical generalisation that describes the tendency for more popular brands to attract light users of the product category. This study shows that this pattern can also explain the underlying ‘trade-off’ between associations that consumers hold in memory for a specific brand vs. other brands, given the same range of category cues or category entry points (e.g., purchase or consumption situations, core benefits etc.). Specifically, the Natural Monopoly can be extended to explain that consumers with limited knowledge of brands are more likely to memorise associations primarily in relation to the most popular brands of the category, which ‘monopolise’ category entry points. This is confirmed with broadly consistent results across three data sets, multiple time-periods and a total of six categories (including CPGs, services and mobile applications). As such, this study significantly expands the generalisability of the Natural Monopoly empirical law by showcasing it as a ‘tool’ to extend knowledge on brand image associations. The results also yield important practical implications for growing a brand's mental availability. For the most popular brands, the outcomes of this study highlight the relevance of reaching out to consumers with limited knowledge of brands within the same category; for the least popular brands, they indicate the importance of building associations with category entry points.

The Negative Binomial Distribution (NBD) is a model that describes consumer purchase frequency over time. This paper tests the applicability of this model to a novel context: physical activity behaviours (using data obtained from Australia, the United States, and Singapore). The fit of the NBD to the data demonstrates that physical activity behaviour is consistent with other consumer behaviour patterns. Within a one-week period, the majority of people are either non- or light-engagers of the different intensities of leisure-time physical activity. Yet, people are not ‘active’ or ‘inactive’, rather, degree of engagement varies. Infrequency of reported levels and variety of physical activities might be due to health promotion having a strong focus on rational persuasion and less focus on mass communication that builds mental availability. Our contribution broadens the applicability of the NBD showing it can be helpful for those seeking to promote health behaviours, not just purchases.

This paper investigates consumer's behavioural loyalty to online supermarkets over time. We use three measures of behavioural loyalty (share of category requirements, repertoire size, and polarisation index) from four major online supermarkets in the UK across five categories. We find that loyalty to online supermarkets is high in the categories we examined, though it declined somewhat from 2005 to 2009 and subsequently remained stable from 2010 to 2014. We also extensively test the generalisability of the well-known Dirichlet model to the choice of online supermarkets. We find that the model gives better fit from 2010 to 2014 than from 2005 to 2009 and can describe loyalty and competition in this context.

Progress in any subject requires the origination of theoretical ideas. Often, new theoretical ideas are derived from unpredicted findings. Some methods, such as surveys, yield more unpredicted findings compared to experiments and too great an emphasis on testing theories by experiment may therefore lead to fewer new ideas. We argue that researchers in marketing and other social sciences should give more consideration to methods that produce large amounts of evidence; by doing so, they may speed up the development of their subject.

At the end of the last century, Sharp and Wright (1999) documented the emergence of a school of marketing enquiry labelled as the Empirical Generalisationists. With this special edition on Empirically-Based Marketing Knowledge, we take the opportunity to update that original article, giving an overview on the health of the Empirical Generalisations research tradition. We put forward a call to action for more researchers to take up the challenge to develop scientific laws in marketing, and promote a culture of evidence-based theory and managerial decision making.