How markets grow. The factors associated with category expansion.
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
|Authors||Nenycz-Thiel, M, Graham, C, Dawes, J, McColl, B, Tanusondjaja, A, Martin, J and Victory, K|
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.
|Keywords||Category Growth; Premiumisation; Category Maturity|
|Accepted author manuscript|
File Access Level
|03 Dec 2018|
|Publication process dates|
|Deposited||20 Nov 2018|
|Accepted||05 Nov 2018|
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