To Grow Your Brand, You Need More Customers. The Key is How Many You Have, Not How Much They Buy.

Abstract

When brands grow, what changes more: the number of households buying, or the average number of units they buy in the course of a year? We examined twelve US package-goods brands that exhibited high growth from 2005 to 2007 to find out the answer. For eleven of the twelve brands, growth was accompanied by a much bigger percentage change in the numbers of households buying the brand, compared to their brand buying rate. The management implication is: to grow, you must attract lots of new buyers and worry less about boosting how much of your brand they buy.

Keywords: brand growth, brand penetration, loyalty

JEL Classification: M31