The usual suspect: Penetration!
Earlier this year we identified three ingredients for brand size:
- Penetration – How many consumers purchase a brand?
- Frequency – How often do consumers purchase this brand
- Volume per occasion – How much of the brand do consumers buy on each occasion?
However, are these ingredients equally crucial for growth over time?
Focusing on brand growth over 5 years, for a multitude of brands, categories and countries*, the verdict is undeniable for both growth & decline – buyers are the key.
The top 30% of growing brands increased:
- Penetration by 37%
- Frequency by 9%
- Volume per occasion by 5%.
In contrast, for the bottom 30% of brands with the greatest decline:
- Penetration was down 34%
- Frequency down 7%
- Volume per occasion down 4%.
What is also intriguing is that the price of the top 30% brands remained very steady – an indication of a greater use of price promotions – potentially to maintain the growth patterns.
*More than 14,500 brands in 13 countries and 80 categories up until 2015.