Abstract
There have been frequent calls in the literature for a more comprehensive understanding of marketing impact on long-term firm performance (Dawes, Meyer-Waarden, & Driesener, 2015; Hanssens & Pauwels, 2016; Lodish & Mela, 2007; Webster & Lusch, 2013). Retail scanner data has been the principal source of empirical evidence in this strategic domain, but it cannot explain the behavioural shifts that underpin sales dynamics. Now that far larger extended household panels are available, there is, for the first time, a valuable behavioural lens with which to observe long-term brand and category buying. In this paper we outline theoretical and methodological challenges to this new type of panel research. The first concerns an approach to extending established marketing theory to long-run repeat buying; the second relates to the inherent constraints of long-term panels. We present a new research agenda to progress explanatory theories of long-run brand building and category growth in this new but largely untapped resource.
Highlights
Marketing management remains under pressure to demonstrate long-run impact from its considerable annual budgets (Binet & Field, 2007, 2013; Hanssens & Pauwels, 2016; Lodish & Mela, 2007; Webster & Lusch, 2013)
Analysing scanner data spanning close to two decades has even allowed modelers to examine how changes in the business cycle impact marketing mix effectiveness (Van Heerde, Gijsenberg, Dekimpe, & Steenkamp, 2013), but perhaps one of the more striking findings has been that for the majority of CPG brands, market share is expected to remain persistently stationary despite the short-term fluctuations that result from marketing activities (Dekimpe & Hanssens, 1995)
Highly informative in describing the characteristics of a brand’s “total” long-run customer base, cumulative analysis of this type masks the detail of any individual brand dynamics
Summary
Marketing management remains under pressure to demonstrate long-run impact from its considerable annual budgets (Binet & Field, 2007, 2013; Hanssens & Pauwels, 2016; Lodish & Mela, 2007; Webster & Lusch, 2013). The class of zero-order models identified above will project cumulative performance measures (including inter-period repeat, drop-out, and attraction rates) across periods of any length To do so, they assume among other things that over time no further consumer learning occurs, that brand and category buying rates will remain independent, and that shopper brand preferences will not change, so brands continue to enter individual household repertoires, but only in line with established propensity distributions. Lal and Padmanabhan (1995) observed that three in five brands were stationary over nine years, Srinivasan et al (2000) found a similar result over seven, and Dekimpe and Hanssens (1995) reported no trend in around eight in ten share-series from a meta-analysis of over 400 studies These sales outcomes do not take account of underlying repeat-buying, and the implications of long-term penetration growth pose intriguing questions for marketing about the cumulative value of behavioural loyalty and the nature of long-term brand building.
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