An Investigation of Variation in Brand Growth and Decline across Categories

Abstract

This study investigates the variation in brand growth and decline across many different product categories. It uses recent consumer panel data from the UK, covering 639 brands across 28 categories, including food, personal care, home care and pet food, over a five-year period from 2008 to 2012. Consistent with the literature, the study finds that most brands in the consumer packaged goods market are stationary, as only 14% of the brands change their market share by more than three points. However, the study discovers that some categories are more dynamic than others. The percentage of brands that change their share by more than three points is different across the categories, varying from 0% to 44%. The study further examines some potential factors that can affect the variation and finds that category penetration and purchase frequency have significant effects on the variation. The lower the category penetration and category purchase frequency, the lower the brand share stationarity. On the other hand, proportion of sales on promotion in the category and new SKU introductions do not have a significant effect on the variation.