The patterns of long-term repeat-buying in Dirichlet markets

PhD Thesis


Graham, C. (2012). The patterns of long-term repeat-buying in Dirichlet markets. PhD Thesis London South Bank University Ehrenberg Centre for Research in Marketing
AuthorsGraham, C.
TypePhD Thesis
Abstract

Dirichlet markets are stationary and unsegmented, and characterised by predictable patterns of split-loyal buying. This is because, across the population, individual but different household purchase propensities tend to remain stable. Although Dirichlet theory is among the most robust in marketing science, it has not yet been shown from empirical evidence how or if these purchase propensities evolve in the long run, knowledge crucial to marketers concerned with disrupting category structure. This thesis now describes the patterns of long-term repeat-buying. The research approach adopted was the differentiated replication and extension of empirical generalisations under the new condition of extended time, evaluating observations in a 26-quarter household panel of continuous reporters against steady-state Dirichlet benchmarks.
In successive and non-adjacent quarters, contrary to widely held beliefs, few cases of persistent brand share growth or decline were observed and quarterly category structures retained Dirichlet characteristics even over six years. But analysis of cumulative data aggregations revealed that underlying purchase propensities were not entirely stable, leading to a gradual deterioration in model fit to longer reference periods. The main pattern observed was an unpredicted and substantial increase in brand switching, but since this remained governed by Double Jeopardy, and category purchase incidence was largely steady, no segmentation resulted and cumulative shares remained near-stationary.
Findings contribute to knowledge of the nature of long-run behavioural loyalty. They establish that new uses of the Dirichlet in modelling management periods at wider intervals are possible since the effects of trending propensities are marginal when viewed in medium term data. They reveal the evolution of the DJ relationship over the long-run, and they confirm the behavioural drivers of exceptional brand dynamics.
Findings also account for several well-reported systematic deviations in short term Dirichlet fit, but perhaps most importantly, the discovery of long-run equilibrium coupled with the unpredicted but systematic underlying churn of buyers between brands offers no support for loyalty strategies. Rather, it emphasises the importance for practitioners of maintaining market share transaction by transaction.

KeywordsNBD-Dirichlet, Double Jeopardy, Empirical Generalisations, Brand Growth, Long-Term Behavioural Loyalty
Year2012
PublisherLondon South Bank University
File
License
File Access Level
Open
Publication dates
Print2012
Publication process dates
Deposited13 Aug 2020
Permalink -

https://openresearch.lsbu.ac.uk/item/8q300

Download files


File
  • 141
    total views
  • 148
    total downloads
  • 2
    views this month
  • 8
    downloads this month

Export as

Related outputs

The Double Jeopardy in high street footfall
Graham, C., O'Rourke, G and Khan, K. (2023). The Double Jeopardy in high street footfall. Journal of Place Management and Development. https://doi.org/10.1108/JPMD-10-2022-0100
Measures of Revolution on the Local High Street
Khan, K., Graham, C. and O'Rourke, G. (2023). Measures of Revolution on the Local High Street. Academy of Marketing Conference 2023. University of Birmingham 04 - 06 Jul 2023 AoM.
Identifying the True Revolution in Loyalty Programmes Thinking: B2B Channel Marketing Adoption and Digital Opportunities
Marjan, A., Graham, C. and Tajvidi, R. (2023). Identifying the True Revolution in Loyalty Programmes Thinking: B2B Channel Marketing Adoption and Digital Opportunities. Academy of Marketing Conference 2023. University of Birmingham 04 - 06 Jul 2023 AoM.
Digital integration in physical retailing. How shoppers augment their own instore experience with a smartphone
Khan, K., Graham, C. and O'Rourke, G. (2022). Digital integration in physical retailing. How shoppers augment their own instore experience with a smartphone. International Conference on the Leadership and Management of Projects in the digital age (IC:LAMP 2022).
Applying Flow Theory to Omnichannel Consumer Behaviour: A Systematic Literature Review
Nguyen, L.T.T., Graham, C., Luong, N. and Tran, M.K. (2022). Applying Flow Theory to Omnichannel Consumer Behaviour: A Systematic Literature Review. The 3rd International Conference on Marketing in the Connected Age (MICA-2022). Da Nang City, Vietnam 01 - 01 Oct 2022 The Danang University of Economics.
Achieving channel leadership through B2B digital loyalty programs
Marjan, A., Graham, C. and Tajvidi, R. (2022). Achieving channel leadership through B2B digital loyalty programs. International Conference on the Leadership and Management of Projects in the digital age (IC:LAMP 2022). Applied Science University (ASU) Bahrain.
La majorite a toujours raison
Snijders, W. and Graham, C. La majorite a toujours raison. in: Snijders, W and Balusseau, V. (ed.) Mange ta soupe ! 20 experts internationaux aident les marques à bien grandir Dunod. pp. Chapitre 1
Quantifying the target market for advertisers
Graham, C. and Kennedy, R. (2021). Quantifying the target market for advertisers. Journal of Consumer Behaviour. https://doi.org/10.1002/cb.1986
Investigating Undercurrents of Stationarity and Growth With Long-Term Panel Data
Dunn, S., Graham, C., Nenycz-Thiel, M. and Tanusondjaja, A. (2021). Investigating Undercurrents of Stationarity and Growth With Long-Term Panel Data. International Journal of Market Research. https://doi.org/10.1177/14707853211039189
Marketing research faces two challenges and a world of opportunity with long-term panel data
Dunn, S., Graham, C., Nenycz-Thiel, M. and Tanusondjaja, A. (2021). Marketing research faces two challenges and a world of opportunity with long-term panel data. SSRN Elsevier. https://doi.org/10.2139/ssrn.3880203
The unbearable lightness of buying
Dawes, J., Graham, C., Trinh, G. and Sharp, B. (2021). The unbearable lightness of buying. Journal of Marketing Management. 38 (7-8), pp. 683-708. https://doi.org/10.1080/0267257x.2021.1963308
Digital Loyalty Programmes: Pull Strategies in B2B Channel Marketing
Marjan, A., Graham, C., Bruce, M. and Mitchell, A. (2021). Digital Loyalty Programmes: Pull Strategies in B2B Channel Marketing. Advances in Marketing, Customer Relationship Management, and E-Services. https://doi.org/10.4018/978-1-7998-8003-5.ch004
The Generation Z Audience for In-App Advertising
Graham, C., Young, F. and Marjan, A. (2021). The Generation Z Audience for In-App Advertising. Journal of Indian Business Research. https://doi.org/10.1108/JIBR-08-2020-0275
A rising tide lifts all boats: the role of share and category changes in managing organic sales growth
Tanusondjaja, A., Graham, C., Dunn, S., Nenycz-Thiel, M. and McColl, Bruce (2021). A rising tide lifts all boats: the role of share and category changes in managing organic sales growth. Journal of Strategic Marketing. https://doi.org/10.1080/0965254x.2020.1817971
Do bookmaker loyalty-programmes cause problem gambling?
Marjan, A., Graham, C., Bruce, M. and Mitchell, A. (2020). Do bookmaker loyalty-programmes cause problem gambling? London London South Bank University. https://doi.org/10.18744/lsbu.8q66q
The Long-Term Erosion of Repeat-Purchase Loyalty
Dawes, J, Graham, C and Trinh, G (2020). The Long-Term Erosion of Repeat-Purchase Loyalty. European Journal of Marketing. https://doi.org/10.1108/EJM-01-2018-0042
Dark Social: The biggest missed opportunity in digital marketing
Marjan, A., Graham, C., Bruce, M. and Mitchell, A. (2020). Dark Social: The biggest missed opportunity in digital marketing. Journal of Digital and Social Media Marketing. 8 (3), pp. 1-6.
Who set the ball rolling? The first prescribers of OxyContin
Wright, M., Stern, P. and Graham, C. (2020). Who set the ball rolling? The first prescribers of OxyContin. European Marketing Academy Conference (EMAC) 2020 . Corvinus University of Budapest, Hungary 26 - 29 May 2020
Is Category Expansion a Realistic Long-Term Objective for Established Brands?
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
The Hazard of Oxycontin
Wright, M, Stern, P and Graham, C. (2019). The Hazard of Oxycontin. Australian & New Zealand Marketing Academy (ANZMAC 2019). Wellington, New Zealand 02 - 05 Dec 2019
Marketing's 60/20 Pareto Law
Sharp, B., Romaniuk, J. and Graham, C. (2019). Marketing's 60/20 Pareto Law. SSRN Elsevier . https://doi.org/10.2139/ssrn.3498097
Why include the BOP in your international marketing strategy
Nagy, M., Bennett, D. and Graham, C. (2019). Why include the BOP in your international marketing strategy. International Marketing Review. https://doi.org/10.1108/IMR-03-2019-0097
A Framework for Market Growth in Bottom-of-the-Pyramid (BOP) Markets
Nagy, M, Bennett, D and Graham, C (2019). A Framework for Market Growth in Bottom-of-the-Pyramid (BOP) Markets. EMAC 48th Annual Conference. Hamburg, Germany 28 - 31 May 2019
Premiumisation strategy as a way to grow
Graham, C, Nenycz-Thiel, M, Dawes, J and McColl, B (2019). Premiumisation strategy as a way to grow. Admap Magazine.
Think Category Not Brand to Break through at the Bottom-of-the-Pyramid (BOP)
Bennett, D, Nagy, M and Graham, C (2019). Think Category Not Brand to Break through at the Bottom-of-the-Pyramid (BOP). Academy of Marketing UK. London 02 - 04 Jul 2019
Majority Report
Graham, C and Snijders, W (2018). Majority Report. in: Snijders, W (ed.) Eat Your Greens Kibworth Beauchamp Troubador Publishing Ltd.
Social responsibility and ethics
Peleg, A and Graham, C (2017). Social responsibility and ethics. in: Sharp, B (ed.) Marketing: Theory, Evidence, Practice Melbourne, Australia Oxford University Press (OUP). pp. 640-692
The Effects of Brand Portfolio Management on Brand Choice Behaviour
Henfrey, C, Graham, C and Bennett, DR (2018). The Effects of Brand Portfolio Management on Brand Choice Behaviour. Academy of Marketing Conference 2018. Stirling, Scotland, UK 02 - 05 Jul 2018 Academy of Marketing.
Predicting Category Growth from Quarterly Penetration
Nenycz-Thiel, M, McColl, B, Dawes, J, Trinh, G and Graham, C (2018). Predicting Category Growth from Quarterly Penetration. Australian & New Zealand Marketing Academy (ANZMAC 2018). Adelaide, Australia 03 - 05 Dec 2018
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
Loyalty Deviations and the Small Brand Syndrome.
Franke, K, Bennett, DR and Graham, C (2018). Loyalty Deviations and the Small Brand Syndrome. Australian & New Zealand Marketing Academy (ANZMAC 2018). Adelaide, Australia 03 - 05 Dec 2018
The effect of cumulative category and brand growth on competitive intensity.
Anesbury, Z, Graham, C and Bennett, DR (2018). The effect of cumulative category and brand growth on competitive intensity. Australian & New Zealand Marketing Academy (ANZMAC 2018). Adelaide, Australia 03 - 05 Dec 2018
Brand Loyalty. Plus ça change...? Using the NBD-Dirichlet parameters to interpret long-term purchase incidence and brand choice.
Graham, C, Scriven, J and Bennett, DR (2012). Brand Loyalty. Plus ça change...? Using the NBD-Dirichlet parameters to interpret long-term purchase incidence and brand choice. International Marketing Trends Conference. Venice, Italy 19 - 21 Jan 2012 London South Bank University.
What long term measures can tell us about brand loyalty
Bennett, DR, Graham, C and Clemente, M (2017). What long term measures can tell us about brand loyalty. Academy of Marketing UK Conference. Hull 03 - 06 Jul 2017
Footfall, attraction and conversion; a retail empirical generalisation
Graham, C (2017). Footfall, attraction and conversion; a retail empirical generalisation. Academy of Marketing. University of Hull 03 - 06 Jul 2017
Loyalty Deficits for Small Share Brands
Franke, K, Bennett, DR and Graham, C (2017). Loyalty Deficits for Small Share Brands. Academy of Marketing UK Conference. Hull 03 - 06 Jul 2017 London South Bank University.
Estimating the value of passing trade from pedestrian density
Graham, C, Khan, K. and Ilyas, M (2017). Estimating the value of passing trade from pedestrian density. Journal of Retailing and Consumer Services. 46, pp. 103-111. https://doi.org/10.1016/j.jretconser.2017.10.005
Double Jeopardy - 50 years on. Reviving a forgotten tool that still predicts brand loyalty
Graham, C, Bennett, DR, Franke, K, Henfrey, C and Nagy-Hamada, M (2017). Double Jeopardy - 50 years on. Reviving a forgotten tool that still predicts brand loyalty. Australasian Marketing Journal. 25 (4), pp. 278-287. https://doi.org/10.1016/j.ausmj.2017.10.009
Making Sense of Common Dirichlet Deviations
Graham, C, Scriven, J and Bound, J (2017). Making Sense of Common Dirichlet Deviations. Australasian Marketing Journal. 25 (4), pp. 294-308. https://doi.org/10.1016/j.ausmj.2017.10.007
The relationship between high street footfall, attraction and conversion
Graham, C (2016). The relationship between high street footfall, attraction and conversion. Business in a Dynamic World conference. Limassol, Cyprus 15 - 17 Jan 2016
Fostering an alumni “Give-Back” culture to help develop student self-esteem
Godfrey, M, Peleg, A and Graham, C (2016). Fostering an alumni “Give-Back” culture to help develop student self-esteem. Chartered Association of Business Schools Teaching and Learning. Aston University, Birmingham 25 - 30 Apr 2016
Market(ing) the small. How does marketing work for UK SMEs?
Barber, S, Bennett, DR and Graham, C (2016). Market(ing) the small. How does marketing work for UK SMEs? LSBU Summer School 2016. London 11 - 15 Jul 2016 London South Bank University.
Will a Smart City Have A High Street?
Graham, C and Peleg, A (2016). Will a Smart City Have A High Street? in: Peres-Ortiz, M, Bennett, D and Perez-Bustamente, D (ed.) Sustainable Smart Cities - Creating Spaces for Technological, Social and Business Development. Springer. pp. 143-157
FIERCE scent boosts mood and emotion to enhance brand assets
Bennett, DR, Graham, C and Basile, E (2015). FIERCE scent boosts mood and emotion to enhance brand assets. LSBU Research Summer School 2015. London South Bank University, London 07 Jul 2015 London South Bank University.
Embedding Employability Skills into the Marketing Curriculum; A Rationale & Description
Graham, C, FitzGerald, F and Peleg, A (2007). Embedding Employability Skills into the Marketing Curriculum; A Rationale & Description. Prime. 2 (2), pp. 25-38.