How marketing balances the battle between premium and regular products? Brand sales dynamics in an emerging market

Abstract

PurposeEvolution and stationarity are key time series empirical concepts which need theoretical assessment by extant research. This study presents a model to explain brand sales dynamics in emerging markets using two dimensions: sales behavior in time (stationary or evolution) and final position (negative, neutral or positive).Design/methodology/approachA three-step methodological approach was performed. First, individual brand sales series were classified (stationarity or evolution) after unit root tests. These series were then regressed against a time variable. These two steps enabled a qualitative classification of six proposed positions, ranging from the worst to the best scenario for marketing managers. A final multinomial model identified the marketing effect to these positions.FindingsDescriptive statistics reveal an insignificant prevalence of stationary sales series and a small number of positive brand sales series (ascending or promising). The multinomial model shows that price is negatively associated to positive brand sales positions, the important effect of service strategies and how product decisions can lead to an avoidance of negative positions.Research limitations/implicationsThe model is limited to short time series of a unique transactional dataset from a multinational energy company based in Brazil.Practical implicationsThe research provides a rational empirical framework to managers involved with decisions regarding brand sales dynamics in emerging markets.Originality/valueThe approach advance into the development of models to uncover conditions for market evolution and stationarity in a context marked by the shortage of data.