Is Category Expansion a Realistic Long-Term Objective for Established Brands?

Conference paper


Dunn, S, Graham, C, Tanusondjaja, A and Nenycz-Thiel, M (2020). Is Category Expansion a Realistic Long-Term Objective for Established Brands? 2020 Academy of Marketing Science World Marketing Congress Brisbane, Australia. Brisbane Australia 14 - 17 Jul 2020
AuthorsDunn, S, Graham, C, Tanusondjaja, A and Nenycz-Thiel, M
TypeConference paper
Abstract

How often do established CPG categories expand following a period of stationarity? To what extent can the levers under manufacturer control bring about persistent growth in total category value? The authors explore these questions in order to test the commonly held assertion that brand leaders in established markets can grow sales by expanding total category demand. Findings from a study of US household panel data describing the purchasing of nearly 500 small and large categories by 60,000 households over a nine-year period are presented. The observations focus on the growth impact of three sales levers, category penetration, purchase volume per buyer, and price per volume paid, in various strategic windows ranging from one to nine years.
The results demonstrate that category penetration increase is the most likely lever for category growth. The association between over-time revenue increase and growth in buying household numbers is far stronger than that between unit price increases or category usage. While this clearly indicates a promising strategic direction for brand management, results also carry a health warning: categories are relatively volatile in the short term, but highly stable over time, therefore while the direction is clear the path is very narrow indeed.

KeywordsCategory Growth, Long-Term, Panel, Penetration, Consumption, Value
Year2020
Accepted author manuscript
License
CC BY 4.0
File Access Level
Open
Publication process dates
Accepted23 Dec 2019
Deposited07 Jan 2020
Web address (URL) of conference proceedingshttps://www.ams-web.org/events/EventDetails.aspx?id=1179003
Permalink -

https://openresearch.lsbu.ac.uk/item/88w2z

Accepted author manuscript

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