Brand History, Geography, and the Persistence of Brand Shares
Bart J. Bronnenberg
CentER, Tilburg University
Sanjay K. Dhar
University of Chicago - Marketing Management
Jean-Pierre H. Dube
University of Chicago - Booth School of Business
November 20, 2008
Journal of Political Economy, Forthcoming
We study persistence in the geographic variation in market shares of branded goods in consumer packaged goods industries across 50 U.S. city-markets. We match scanner data on local market shares and survey data on local quality perceptions for the largest brands in 34 consumer packaged goods industries. These data are then matched with historic information on the year and US city-market in which each brand was first launched. We find that these consumer brands have persistently higher market shares in markets closest to their respective cities-of-origin than in markets farthest from their respective cities-of-origin, where they were typically launched later. For 6 of the 34 industries, we collected more complete historic entry data with which we can determine the local order of entry among the top brands in each of the 50 U.S. city-markets. We find a persistent effect from differences in the order-of-entry of competing brands on their current relative brand shares and quality perceptions across US cities. The historic order of entry also appears to correlate with the current rank-order of brand shares across cities, leading to large asymmetries across markets in brand shares and in quality perceptions. This persistence is particularly striking since many of the brands studied herein originated during the mid-to-late 19th and early 20th centuries, roughly a century prior to the sample period of the market share and quality perception data.
Number of Pages in PDF File: 33
JEL Classification: L11, L66, M30, M37, R12Accepted Paper Series
Date posted: September 29, 2008 ; Last revised: February 12, 2009
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