MARKET SHARE DYNAMICS DURING NEW BRAND LAUNCHING IN ROUTINELY PURCHASED PRODUCT

Abstract

Market share on a daily basis has unstable behavior. New brand launch causes disruptions in market dynamics, but it does not explain exclusively the fluctuations in this competitive index. Branding and pricing strategies help to explain these fluctuations. This research examines the impact of introducing new brands on brand share and the impact of marketing strategies at point of sale in prior and subsequent periods of brand launch. Longitudinal design was conducted using eight brands of a routinely purchased product over 365 days. Generalized Estimating Equations (GEE) were suitable to analyze the regression of the panel data. The results show that: (1) brand launch has a sharp negative impact on the market share of all pre-existing brands during the subsequent days and a dampening impact weeks later for almost all brands, except for the pioneer; (2) brand introduction explains little variation of market share; (3) pricing and branding (differentiation of attributes and consumer-based brand equity) strategies have exponential effect and quite explain the market share dynamics; (4) pricing strategies (promotional, premium and shelf) no longer have extreme effects on market share with brand introductions; and (5) branding strategies become more relevant in post-launch periods. These results move forward the knowledge on brand performance in times of new brand introduction in the market.