Abstract
This paper proposes and validates the negative binomial distribution (NBD) to predict the variation in repertoire size (the number of brands purchased by a consumer in a specific time period) within a category. From a managerial perspective, the variation is crucial for brand managers who would like to know the nature and intensity of competition that is facing their brands. Empirical findings across multiple datasets from UK consumer packaged goods demonstrate that the NBD model predicts variations in repertoire size very well in different time periods (1year, 18months and 3years), and different buyer groups (light and heavy category buyers). The paper then suggests a simple method to predict those who are brand exclusively loyal, those who are loyal to a few brands, and those who are diversified to buy multiple brands, based on very little information such as category and brand penetrations, using the parameters of the NBD model.
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