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Article

John G. Dawes, Charles Graham and Giang Trinh

The study investigates the long-term erosion of repeat-purchase loyalty among consumers who purchase brands in a one-year base period.

Abstract

Purpose

The study investigates the long-term erosion of repeat-purchase loyalty among consumers who purchase brands in a one-year base period.

Design/methodology/approach

The study uses a five-year consumer panel of continuous reporters. We identify brand buyers in a base year, then calculate the proportion that fail to buy the brand in later years. We analyse the top 20 brands in 10 consumer goods categories.

Findings

We find pronounced erosion in repeat-buying over the long-term. The proportion of buyers from a base year that fail to buy in a later year increases steadily over time, from 57% in year 2 to 71.5% by year 5. Moreover, we identify brand and marketing mix factors linked to this over-time customer loss or erosion.

Research limitations/implications

The study provides evidence that consumers’ propensity to buy particular brands changes over a period of years, even though those brands continue to exhibit a stable market share. This evidence provides a different interpretation than the literature to date, which has viewed purchase propensities as fixed.

Practical implications

The study finds that store brands and niche brands exhibit lower levels of erosion in their buyer base; that a broad range is associated with lower erosion, and that high price promotion incidence is associated with lower erosion for manufacturer brands.

Originality/value

Loyalty erosion has been reported before (Ehrenberg, 1988; East and Hammond, 1996) but only over short periods. This study examines the phenomenon over five years, confirms that the rate of erosion does diminish over time, and that it is related to category and brand characteristics, as well as marketing mix decisions.

Details

European Journal of Marketing, vol. 55 no. 3
Type: Research Article
ISSN: 0309-0566

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Article

John G. Dawes

This paper aims to investigate the extent to which temporary price promotions attract people who do not normally buy a brand, and whether buyers change their propensity to…

Abstract

Purpose

This paper aims to investigate the extent to which temporary price promotions attract people who do not normally buy a brand, and whether buyers change their propensity to buy the promoted brand afterwards.

Design/methodology/approach

The study analyses promotions in 18 consumer goods categories in the UK and USA. It calculates the proportion of promotion purchasers that have bought a brand at least once in their last five purchases and the Share of Category Requirements of those purchasers. These figures are then compared to normal-price purchasers.

Findings

The study finds the majority of price-promotion buyers already bought the brand at least once in their last five category purchases (average = 77 per cent). This figure is similar to that for normal-price purchases (average = 81 per cent). Average Household SCR to the brand is also very similar for price-promotion purchases compared to normal price purchases. Therefore, promotions do not attract a markedly different mix of buyers. Furthermore, buyer propensity to buy the brand is the same after a promotion purchase as it was before.

Research limitations/implications

A contribution of the paper is that it supports a theory of consumers as cognitive misers, who screen out promotion information about unfamiliar brands. The paper also highlights that in packaged-goods markets, consumers can be generally seen as experienced buyers, who do not learn new information from buying brands they have previously purchased.

Practical implications

The managerial implication is that price promotions must be judged on their immediate profitability. There seems little recourse to the idea they can result in “try it, like it, buy it again later” effects.

Originality/value

While many studies have examined the effects of price promotions, this is the first to explicitly compare the mix of buyers attracted from a price promotion to that which occurs when a brand is sold at normal price.

Details

Journal of Consumer Marketing, vol. 35 no. 4
Type: Research Article
ISSN: 0736-3761

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Article

Bryony Jardine, Jenni Romaniuk, John G. Dawes and Virginia Beal

This paper aims to investigate factors associated with higher or lower television audience retention from one programme aired sequentially after another, referred to as…

Abstract

Purpose

This paper aims to investigate factors associated with higher or lower television audience retention from one programme aired sequentially after another, referred to as lead-in audience retention. Lead-in is a primary determinant of television programme audience size.

Design/methodology/approach

The study models a series of factors linked to lead-in audience retention, such as rating of the second programme, genre match and competitor options. The hypothesised relationships are tested across over 1,000 pairs of programmes aired in the UK and Australia, using multivariate linear regression models.

Findings

The study finds the factors consistently related to significantly higher lead-in audience retention are the rating of the second programme in the pair and news genre match in programming. Factors consistently linked to lower audience retention include the rating of the initial programme and the number of competitor options starting at the same time as the second programme.

Practical implications

The findings help television networks understand drivers of lead-in audience retention. Knowledge that can be used to inform the design of tailored marketing plans for programmes based on schedule, timing and adjacent programming. Further, the findings help advertisers and media buyers with scheduling television advertising to achieve reach or frequency objectives.

Originality/value

No previous studies have comprehensively combined all four factors driving lead-in audience retention into a single model. The testing across multiple markets adds to the robustness of the findings. In particular, the discoveries about the impact of competitor network activities and genre build considerably on past research.

Details

European Journal of Marketing, vol. 50 no. 7/8
Type: Research Article
ISSN: 0309-0566

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Article

Jenni Romaniuk, John Dawes and Magda Nenycz-Thiel

The purpose of this 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…

Abstract

Purpose

The purpose of this 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).

Design/methodology/approach

The study utilizes 24 data sets in 17 packaged goods categories in three emerging markets: China, Malaysia and Indonesia. The authors examine changes in penetration, loyalty and SCR in the context of volume and value market share change. In addition, the authors examine whether initial price point and price movements influence the results.

Findings

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.

Practical implications

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.

Originality/value

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 vs consumer retention.

Details

International Marketing Review, vol. 35 no. 5
Type: Research Article
ISSN: 0265-1335

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Article

John Dawes

There is increasing managerial and academic interest in understanding behavioural loyalty to private label (PL) brands. A widely used behavioural loyalty measure is share…

Abstract

Purpose

There is increasing managerial and academic interest in understanding behavioural loyalty to private label (PL) brands. A widely used behavioural loyalty measure is share of category requirements, or “SCR”. This study aims to examine why some PLs enjoy higher levels of SCR compared to others.

Design/methodology/approach

The study models consumer purchase data using the well-accepted NBD-Dirichlet model to identify the circumstances in which PL brands exhibit higher (“excess”) or lower SCR than expected.

Findings

The study finds four factors linked to excess SCR for PLs. They are: higher share of overall category sales accounted for by the PL within the retailer's stores, higher penetration of the category by the retailer, low relative price of the PL, and lastly, lower average purchase frequency for the category overall.

Research limitations/implications

While the study uses 13 product categories, its geographic scope is limited to the UK. Further research could examine how the findings generalize to other markets.

Originality/value

The study is original in that it identifies factors that are linked to behavioural loyalty toward specific PL brands. The findings will help marketers in brand management and retailing to understand and contextualize brand performance metrics for PL brands.

Details

European Journal of Marketing, vol. 47 no. 11/12
Type: Research Article
ISSN: 0309-0566

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Article

Giang Trinh, John Dawes and Larry Lockshin

This study responds to the call of Fader and Hardie for more research on buyer behaviour toward stock keeping units (SKU). This paper aims to examine whether different…

Abstract

Purpose

This study responds to the call of Fader and Hardie for more research on buyer behaviour toward stock keeping units (SKU). This paper aims to examine whether different SKU‐based product variants appeal to buyers with different demographic characteristics.

Design/methodology/approach

This study examines the product variants (such as size, formulation, type) of a range of brands in six consumer goods categories. The authors calculate and compare the market share of each variant within each demographic group. If a variant has a higher market share within a specific demographic group than the overall average, this indicates segmentation at the product variant level.

Findings

The findings show that there are many differences in the market shares of product variants among different demographic groups of buyers. The largest differences are found extensively within the age and employment status variables.

Originality/value

Functionally different product variants tend to draw different demographic‐based segments of buyers, which has not been previously shown.

Details

Journal of Product & Brand Management, vol. 18 no. 2
Type: Research Article
ISSN: 1061-0421

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Article

John G. Dawes

The purpose of this paper is to determine if services brands such as banks share their customers with competing brands in line with the market share of those competitors…

Abstract

Purpose

The purpose of this paper is to determine if services brands such as banks share their customers with competing brands in line with the market share of those competitors, and whether services brands with similar images form market partitions with heightened competitive intensity.

Design/methodology/approach

The study uses brand usage, forced-choice and brand perceptions data obtained from a survey of consumers. The study uses a log-linear modelling framework to identify market structure and to test if partitions correspond to similarities in brand image.

Findings

Analysis of in-market data shows customers share their requirements between competing brands in line with market share, and that brands with similar images do not form partitions. However, when consumers are asked to choose brands for a specific product, there is some tentative evidence of brand partitions among brands with similar brand image.

Practical implications

The results here can help managers in service markets such as banking and insurance understand market structure. As a result, they can better plan customer acquisition and retention strategies.

Originality/value

The study addresses a lack of research into customer sharing and switching in services markets. No previous study has successfully employed brand-sharing, forced-choice and brand image data to identify market structure in a services context.

Details

European Journal of Marketing, vol. 48 no. 5/6
Type: Research Article
ISSN: 0309-0566

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Article

John Dawes

Many studies have examined the short‐term and long‐term effects of price promotions. This study adds to previous research by examining, in some depth, the effects of a…

Abstract

Many studies have examined the short‐term and long‐term effects of price promotions. This study adds to previous research by examining, in some depth, the effects of a massively successful price promotion in a consumer goods category. This study sought to determine if this large price promotion had any: longer‐term effect on brand volume; short‐term effect on total category volume for the retailer; short‐term effect on competing retailers; and longer‐term effect on category sales for the retailer that ran the promotion. The results showed that this promotion did not have any longer‐term (positive or negative) effect on the brand, but it did expand the total category for the retailer, albeit temporarily. Sales dropped slightly for one competing retailer at the time of the promotion, but not for the other two retailers in the market. Finally, the study found that the promotion was followed by a decline in total category volume for the retailer, suggesting some degree of purchase acceleration or stockpiling by consumers. The results suggest that the longer‐term negative effect on category volume cancelled out approximately two thirds of the gains of the price promotion to the retailer.

Details

Journal of Product & Brand Management, vol. 13 no. 5
Type: Research Article
ISSN: 1061-0421

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Article

John Dawes, Jenni Romaniuk and Annabel Mansfield

The purpose of this paper is to examine competition between tourism destination brands in terms of how they share travelers with each other.

Abstract

Purpose

The purpose of this paper is to examine competition between tourism destination brands in terms of how they share travelers with each other.

Design/methodology/approach

The study analyzes survey data from four international markets (USA, UK, Japan and Singapore). The study examines the cross‐purchasing of travel destinations. It applies an established empirical generalization, the duplication of purchase law (DPL) to frame hypotheses and contextualize results.

Findings

The overall results are consistent with the DPL. Destination brands share tourists with other destinations generally in‐line with the popularity of the competing destination. However, there are very noticeable market partitions, most of which take two forms: destinations that are either geographically close to each other, or close to the point of origin. Destination brands in these partitions share travelers far more than they would be expected to, given their respective size.

Practical implications

Tourism marketers need to appreciate the broad nature of competition. A specific destination brand competes with many other travel destinations, sharing customers more with other broadly popular destinations and less with less popular destinations.

Originality/value

The analytical approach presented in this study provides a straightforward benchmark for assessing the expected level of competition between particular tourist destinations, given their respective overall popularity.

Details

International Journal of Culture, Tourism and Hospitality Research, vol. 3 no. 1
Type: Research Article
ISSN: 1750-6182

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Article

John Dawes

This paper examines the relationship between price changes and customer defection levels in a “subscription”‐type market, namely car insurance. Two regression models are…

Abstract

This paper examines the relationship between price changes and customer defection levels in a “subscription”‐type market, namely car insurance. Two regression models are constructed to estimate this relationship, one model for younger customers and another for older customers. The regression models closely estimate the defection rates associated with different levels of price changes. The analysis also shows that the impact of price decreases on defection rates is less than the impact of price increases, extending previous research. The paper notes that models of this type should offer true predictive ability and therefore tests the ability of the model to predict defection rates for new data. The models performed comparatively poorly in this regard, particularly for price increases. The paper concludes that multiple sets of data are needed to develop and validate predictive models.

Details

Journal of Services Marketing, vol. 18 no. 1
Type: Research Article
ISSN: 0887-6045

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