The stability and contribution of heavy buyers
Date
2010
Authors
Romaniuk, J.T.
Wight, S.T.
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Conference paper
Citation
6th international conference 2010 - thought leaders in brand management, 2010, pp.1180-1189
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Thought Leaders in Brand Management (18 Apr 2010 - 20 Apr 2010 : Lugano, Switzerland)
Abstract
Heavy buyers are considered attractive targets to retain or recruit. This segment is identified based on past purchase behaviour, which then provides the a priori classification for assessing the effectiveness of marketing interventions. This research examines the stability of such classifications. Drawing on consumer panel data for 74 brands and six categories, heavy buyers of a brand are identified in one year and then classified again using their next years' purchases. Across three definitions of heavy buyers (top 20/10% and purchase frequency) consistently only about 50% ofheavy brand buyers remained heavy buyers in the subsequent year. Regression modelling of the sales contribution of heavy brand buyers revealed that this drops in value by 17pp in year two. At category level, 25% of heavy category buyers switched out of the segment in the subsequent year, but theirs sales contribution only drops by 5pp. These benchmarks for chum and future sales can be used to evaluate the success of targeted activities.
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Copyright 2010 The Authors