NB innovation and market share
With new product activity down, does this behavior impact market share and penetration? We differentiate NBs by innovation activity in the following way:
More innovative = the NB launches more in 2020 compared to 2018
Equally innovative = the NB has the same number of launches
Equally non innovative = the NB does not innovate in either year
Less innovative = the NB is less innovative in 2020 compared to 2018
What we find:
- NBs that innovated (more innovations or equal to 2018) did on average experience an increase in market share (+ 0.1 %) and maintained penetration.
- NBs which did not innovate in both years saw both their market share and penetration decline by half a percentage point.
- NBs which reduced the number of new products launched between 2018 and 2020 also experienced a decline in both market share (-0.3%) and penetration (-0.7%).
Innovations certainly are not the only strategic weapon at brands’ disposal, but they sure are effective. Brand managers are well advised to be active with respect to innovation – whether times are good or bad.
Countries included: Austria, Belgium, Hungary, Italy, Netherlands, Poland, Romania, Spain, Data on NBs Launch Activities between 2018 and 2020.