Dr Margaret Faulkner, Course Coordinator

Branding MARK 3015: Topic 2

Ehrenberg’s Law of Buying Frequencies

Ehrenberg’s Law of • What does the distribution of brand buying look like?

Buying Frequencies – Do we see differences for market leaders or small brands?

– Does it change depending upon the category/country?
• What are the implications for setting strategies to grow brands?

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Buying Frequencies We can predict buying frequencies
Category
Would you expect this? Or this? Or this? (every brand)
100
90

% of customers
80
% of customers

70
60
50
40
30
20
0 1 2 3 4 . . . . . . . 12 . . . . . . . .
10
0
purchases per year 0 1 2 3 4 5 6 7 8 9 10+
purchases per year China, 2013
5 6

Ehrenberg’s Law of Buying Frequencies Table 2.1 HBG PT 2, p 29: Chinese Toothpaste
Andrew Ehrenberg (1959) identified the Negative
Binomial Distribution in buying frequencies of all brands, Brand Buying frequency Year 1% Year 2 % Change (Y2-Y1)

i.e. No Brand is Different (NBD).

Zero 91.7 89.8 -1.9

Once 5.0 6.3 1.3

• Larger share brands have more people buying them,
Twice 1.6 2.0 0.4
at a slightly more frequent rate (DJ).
Three times 0.7 0.8 0.2

• The biggest shift when brands grow is the zero buyer Four times 0.6 0.5 -0.1

column shrinks - more light buyers are gained than Five times or more 0.5 0.5 0
heavy, but all frequencies increase.
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Holds accross categories & countries
We can predict where change will occur
Figure 2.1 Ehrenberg’s Law of Buying Frequencies allows
HBG Pt 2, p 27 Toothpaste Brazil predictions of future frequency distributions.
100
All brands have many infrequent (light) buyers and a
90
long tail of a few (very) frequent buyers.
% of customers

80
70
60
50 • If market share changes for a brand then ALL
40
30 buying frequencies will change in line with the
20 negative binomial distribution, i.e. most change
10
0 will occur in the ‘light’ buying frequencies.
0 1-3 4-6 7-10 11+ • See How Brands Grow: Part 2, Romaniuk & Sharp (2016) pages 27-28
purchases
China, 2013
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Light buyers matter

Summary
• Buying frequencies follow the same distribution for all brands

More light buyers are needed to grow a brand – No Brand is Different, all show a reverse-J shape distribution, as per the
negative binomial distribution (NBD)
– In 1959 Andrew Ehrenberg identified this distribution in the buying
Reaching and monitoring light buyers is also
frequencies of brands
needed to maintain share
• Ehrenberg’s Law of Buying Frequencies informs strategies to grow
brands
Neglect light buyers at your peril!

Our lightest buyers really matter

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