Distribution and Market Share

Journal of Retailing, Forthcoming

34 Pages Posted: 31 Jul 2008 Last revised: 15 Jul 2013

Kenneth C. Wilbur

University of California, San Diego (UCSD) - Rady School of Management

Paul Farris

University of Virginia - Darden School of Business

Date Written: July 15, 2013

Abstract

This paper presents findings from a census of more than 79,000 stock-keeping units (SKUs) in 37 consumer packaged goods categories totaling $55 billion in annual revenue. It shows that, in 86% of product categories, the relationship between market share and retail distribution is increasing and convex at the SKU level. The degree of convexity is greater in categories with higher revenues and more concentration in market shares. The relationship is also typically convex within leading brands’ SKU portfolios, showing that the “double jeopardy” phenomenon of low share and distribution not only affects small brands competing against market leaders, it also affects low-share SKUs within a category leader’s product line. Holdout evidence shows that the distribution/share relationship within a brand’s portfolio of existing SKUs usually holds for new SKUs as well. We explain how knowledge of the distribution/share relationship can help to improve a brand’s go-to-market decisions for new SKUs.

Keywords: Consumer Package Goods, Distribution, Market Share, New Products, Retailing

JEL Classification: E37, L11, L20, L21, L23, L66, L67, L81, M11, M31, C14

Suggested Citation

Wilbur, Kenneth C. and Farris, Paul, Distribution and Market Share (July 15, 2013). Journal of Retailing, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1175869 or http://dx.doi.org/10.2139/ssrn.1175869

Kenneth C. Wilbur (Contact Author)

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

HOME PAGE: http://kennethcwilbur.com

Paul Farris

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-0524 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/farris.htm

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