It's a Dirichlet World: Modeling Individuals' Loyalties Reveals How Brands Compete, Grow, and Decline

The Dirichlet is one of the most important theoretical achievements of marketing science. It provides insights into the distribution of consumer loyalties and is used widely in industry for benchmarking and interpreting brand performance.

It’s a Dirichlet World: Modeling Individuals’ Loyalties Reveals How Brands Compete, Grow, and Decline

Byron Sharp

Ehrenberg-Bass Institute

Malcolm Wright

Massey University

John Dawes and Carl Driesener

Ehrenberg-Bass Institute

Lars Meyer-Waarden

EM Business School Strasbourg

Lara Stocchi

Ehrenberg-Bass Institute

Philip Stern

Loughborough University and Ehrenberg-Bass Institute

Management slant

  • The Dirichlet is increasingly used in industry to evaluate brand performance and set objectives; practitioners need to be aware of its implications.
  • Managers need to understand its ubiquity and use it to evaluate their brand plans and performance.
  • The paper shows that apparent consumer choice volatility masks much more significant...

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