Dirichlet.xls

Researchers such as Ehrenberg have repeatedly demonstrated that simple parameters such as penetration and purchase frequency are capable of accurately predicting many aspects of behavioural loyalty. Ehrenberg's main contention comes from the synthesis of more than forty years of routine analyses of consumer panel data in an effort to establish empirical regularities

Perhaps the most widely known finding from this programme of research is that patterns in loyalty relate to the sales level or market shares of brands, especially in stationary markets. In general, many observed patterns of buying do not depend on the brand or product itself, nor on what else the buyers of the brand buy, nor on external factors such as advertising, pricing, and distribution. Instead the patterns of behaviour can be explained simply by how many people buy the brand and how often.

RESOURCES

Excel Worksheet for Fitting Dirichlet Model dirichlet vb.zip updated 20 May 2002

Ehrenberg's Book Repeat Buying, Facts, Theory and Applications Repeat Buying