3 ingredients for brand sales success
There are three components that explain high or low brand sales:
1. Penetration – How many consumers purchase a brand?
2. Frequency – How often do consumers purchase this brand?
3. Volume per occasion – How much of the brand do consumers buy on each occassion?
We compared these 3 components for the average number 1 and the average number 5 brand in 13 countries and for more than 80 categories. As expected, the biggest difference between number 1 and number 5 is penetration, but they also enjoy an advantage with respect to the other drivers. The median difference shows that number one has nearly 5 times more buyers than number five, a 30% higher purchase frequency and 8% more volume on each purchase occasion. This extra volume is likely a consequence of both a higher incidence of promotional activity and higher willingness by shoppers to load up on well-known brands.