An investigation in brand growth and decline across categories

Giang Tue Trinh and Zachary William Anesbury

Ehrenberg-Bass Institute for Marketing Science, University of South Australia

Introduction

Marketing practitioners spend a great deal of money and effort to increase their brands’ market share. In order to do so they commission activities such as new creative advertisements, new product development and price promotions, to help increase the number of buyers and/or the frequency of those buyers that purchase their brand. Empirical evidence, however, has shown that these actions tend to lean towards short-term brand market share gains, but the norm is long-term equilibrium (Dekimpe & Hanssens 1995; Pauwels et al. 2002; Graham 2009). Short-term gains often cause competitor responses, which in turn neutralise any gains (Bass & Pilon 1980; Srinivasan et al. 2000). This, then, means that marketers are simply running hard to stand still as, in the long term, marketing activities mostly maintain market share as opposed to growing brands.