New brand launches are risky endeavors for marketers, as many fail to attract a sustainable customer base. This research examines the buying behavior of customers acquired by a new brand and revisits the theoretical norms of the NBD-Dirichlet model benchmarks. Investigating 40 new brand launches in the UK, across a wide range of brand and category conditions, we find that in the first 12 months, new launches have more, but less loyal buyers than expected from NBD-Dirichlet benchmarks, irrespective of type, price point, or the sales gained by the new launch. Further we find exploratory evidence that new buyers of brands have weaker associations than existing buyers. We propose that the combination of the new experience that lacks distinctiveness in encoding means that the experience of buying the new brand creates weaker memory traces in new buyers and that these buyers need additional marketing reinforcement to consolidate the memory of buying the brand to establish the brand in their ongoing repertoire.
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The authors thank an anonymous reviewer, the editor and colleagues at the Ehrenberg-Bass Institute for their helpful comments and suggestions that lead to a significantly improved article.
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Trinh, G., Romaniuk, J. & Tanusondjaja, A. Benchmarking buyer behavior towards new brands. Mark Lett 27, 743–752 (2016). https://doi.org/10.1007/s11002-015-9376-8
- New brand launches
- NBD-Dirichlet model
- Packaged goods