Lower shares can lead in frequent categories

Posted by Oliver Koll on Aug 12, 2015

brandleadersLess than 10% of all category leaders have market shares of more than 50% whereas more than one third has less than 20% share. What differentiates these brands? Not surprisingly, high share brands enjoy many more category buyers but differ little in purchase frequency (as shown in previous newsletters)*. However, the smaller leaders also compete in different types of categories – whereas the average category purchase frequency for 50%+ share leaders is less than 5 times per year, it goes up to 9 times per year for the leaders with low share. This provides more insight on how purchasing frequency in a category impacts brand success – as category buying frequency goes up, consumers have more opportunity to switch and higher shares are harder to come by.

* Also see Ehrenberg papers and Byron Sharp, How Brands Grow, Oxford University Press, 2010