What really drives market share growth?

Ok ok ok, first of all: caveats galore. This stuff is complicated. And multifaceted.

But Bruce Clark of Northeastern University did an elegant study recently that gives us some clarity. 

18,000 shoppers. 112 brands, 36 countries, 1 FMCG category. (Pretend it’s snacks. Or soda.) One nice set of year-over-year data.

So what really drives market share growth (or decline)? After some big analysis, he found, in rank order:

1. Household penetration (HHP). Bigly. It is — once again — the major driver of share changes.

2. Next up is share-of-wallet (SOR: what percent of category purchases a brand captures). Tho you should recall that SOR is highly correlated with HHP.

3. Brand associations are 3rd.

4. And bringing up the rear — 1/15th as powerful as HHP — is brand awareness.

This is a great replication and extension of the Double Jeopardy law identified by Andrew Ehrenberg in 1972 and promulgated by the Ehrenberg-Bass Institute of the University of South Australia. 

Check out the whole lovely paper at SSRN, ID 4850244.

Some Clear And Present Lessons:

🍊 Wanna grow market share? Get. more. customers.

🍊At least for 1-yr growth, behavioral factors matter muchly more than mental ones.