How brand loyal shoppers respond to three different brand discontinuation scenarios

Denisa Hebblethwaite, Andrew G. Parsons, Mark T. Spence

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Purpose: Retailers may respond to a manufacturer discontinuing a brand or product range in three ways: not offering an alternative, thus reducing the assortment size; replacing it with a substitute; or introducing a rebranded product by the same manufacturer, if such an option is available. This study aims to evaluate all three scenarios and assess the extent to which total category sales are affected; how these discontinuations affect alternative offerings within the product category; and whether usage levels moderate within category switching behaviour. Shoppers did not have the option of switching stores to acquire the discontinued brand – their preferred brand/product range ceased to exist. Design/methodology/approach: All three studies are quasi-experiments using scanner panel data. The product discontinuations examined are real events that took place within the major supermarket chain in New Zealand. Findings: In all the three scenarios, average category sales decreased for the three-month period following the discontinuation. In Study 1, where a preferred brand of milk was discontinued with no replacement, overall category sales decreased but competing brands gained sales; introducing a replacement corn chip range (Study 2) successfully captured the spend on the discontinued range, but other brands lost sales; and rebranding a cereal (Study 3) decreased both brand sales and category sales. With the exception of Study 1, near-substitute product offerings did not capture a greater proportion of the spend from the discontinued brand as compared to less similar substitutes. Expectations were that heavy users would have a greater propensity to shift to near alternatives than would medium/light users; however, none of the studies lend support. Originality/value: This is the first research effort to use scanner panel data to explore the reactions by brand loyal customers to three different brand discontinuation scenarios initiated by the manufacturer.

Original languageEnglish
Pages (from-to)1918-1937
Number of pages20
JournalEuropean Journal of Marketing
Volume51
Issue number11-12
DOIs
Publication statusPublished - 1 Jan 2017

Fingerprint

Scenarios
Substitute
Replacement
Scanner panel data
Lost sales
Rebranding
Milk
Supermarkets
Proportion
New Zealand
Retailers
Cereals
Design methodology
Quasi-experiment
Assortment
Switching behavior
Propensity
Corn
Product category

Cite this

Hebblethwaite, Denisa ; Parsons, Andrew G. ; Spence, Mark T. / How brand loyal shoppers respond to three different brand discontinuation scenarios. In: European Journal of Marketing. 2017 ; Vol. 51, No. 11-12. pp. 1918-1937.
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How brand loyal shoppers respond to three different brand discontinuation scenarios. / Hebblethwaite, Denisa; Parsons, Andrew G.; Spence, Mark T.

In: European Journal of Marketing, Vol. 51, No. 11-12, 01.01.2017, p. 1918-1937.

Research output: Contribution to journalArticleResearchpeer-review

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