How to grow share: get more buyers
Exploring 5 year trends of some 2,400 major brands in 79 FMCG categories across eight European markets reveals two very consistent patterns:
- Whether the brand has been among the top winners or the top losers in market share, this has little relationship to changes in how often its buyers choose the brand.
- What explains market share gains and losses is the ability of a brand to attract buyers: On average a 1% change in buyer penetration translates into a 1% change in share. The direct relationship between brand size and number of buyers has been established decades ago by scholars like McPhee or Ehrenberg.
Overall 48% of these brands experienced an increase in market share (the slightly higher number of losers can be attributed to Private Label growth).
These winners tend to launch more new SKUs and a larger part of their assortments consists of new SKUs.
Suggested Readings:
McPhee, W. N. (1963), Formal Theories of Mass Behavior. New York: The Free Press.
Ehrenberg, Andrew S. C., Gerald J. Goodhardt, and T. Patrick Barwise (1990), Double Jeopardy Revisited, Journal of Marketing, 54 (July), 82-91.
Sharp, Byron (2010), How Brands Grow, Oxford University Press.
We are analysing the characteristics of winners and losers in much more detail within BG20, our research program to understand context-specific drivers of brand growth.
