How markets grow. The factors associated with category expansion.

Conference paper


Nenycz-Thiel, M, Graham, C, Dawes, J, McColl, B, Tanusondjaja, A, Martin, J and Victory, K (2018). How markets grow. The factors associated with category expansion. Australian & New Zealand Marketing Academy (ANZMAC 2018). Adelaide, Australia 03 - 05 Dec 2018
AuthorsNenycz-Thiel, M, Graham, C, Dawes, J, McColl, B, Tanusondjaja, A, Martin, J and Victory, K
TypeConference paper
Abstract

We advance knowledge of category growth in developed markets, identifying the factors under manufacturer control that are consistently associated with change in category sales level. The analysis is based on scanner data from four developed markets, 20 packaged goods categories, over 6-8 years. We find that of all factors, change in price per volume has the strongest association with change in category sales, followed by change in the number of SKUs. The intensity of price promotions in the category has no relationship with category sales increase. Category maturity, in terms of relative quarterly penetration, is an important defining condition; below 50%, category sales grow through volume increases. Above that threshold, growth is driven by increases in price, but we find that introducing new SKUs is a common method for manufacturers to increase price per unit at maturity. Brand premiumisation therefore holds the key to growth in equilibrium markets.

KeywordsCategory Growth; Premiumisation; Category Maturity
Year2018
Accepted author manuscript
License
CC BY 4.0
Publication dates
Print03 Dec 2018
Publication process dates
Deposited20 Nov 2018
Accepted05 Nov 2018
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https://openresearch.lsbu.ac.uk/item/86868

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