Why Brands Grow

What causes brands to grow over time? The article addresses this important question. Measures of market share, market penetration, customer loyalty, and price were gathered in two time periods, five years apart, for 353 brands in 21 categories of fast-moving consumer goods.

Why Brands Grow

Allan L. Baldinger, IPSOS-NPDEdward Blair, University of Houston andRaj Echambadi, University of Central Florida

Why do some brands grow over time? Why do some decline? What are the roles of market penetration and customer loyalty in this process? For example, is growth in penetration the key to growth in market share? If a brand is static in penetration, but does a good job of building customer loyalty, will it grow? Is loyalty the key to staving off decline?

The existing literature does not answer these questions. It tells...

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