Two type of repeat purchase market, with different loyalty patterns

Sharp, Byron. & Wright, Malcolm (1999) ‘There are Two Types of Repeat Purchase Markets’, paper presented to the 28th European Marketing Academy Conference, Berlin, Germany, 11-14 May.

Abstract

In this paper we report on a pattern in aggregate buying behaviour. We have observed two distinct types of repeat purchase markets with very different patterns of customer loyalty. These differences have profound implications for marketing theory and practice.

The first, and best known, are markets with relatively few solely loyal buyers and with buyers allocating their category requirements across several brands; we call these repertoire markets. Examples of repertoire markets include fast moving consumer goods, store choice, medical prescriptions, and television channel selection.

The second are markets with many solely loyal buyers, and with buyers allocating their category requirements almost entirely to one brand; we call these subscription markets. Examples of subscription markets include insurance policies, long distance phone calls, and banking services.

The distinction between these two types of markets is not a theoretical taxonomy, but is instead a dramatic empirical difference. For example, the proportion of solely loyal buyers enjoyed by a brand over a year seldom exceeds 20% in a repertoire market, but seldom falls below 70% in a subscription market. There is virtually no middle ground between these extremes.

Download full paper as PDF.

 

https://www.dropbox.com/s/7ufcbx1tfpzcfzg/6007.pdf

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4 thoughts on “Two type of repeat purchase market, with different loyalty patterns

  1. I wonder whether subscription markets are trending to be more like repertoire markets because of growing consumer use of the internet in these categories. It would be good to update this 13 years old paper to find out. Is consumer use of the internet shortening purchase cycles and reducing loyalty in subscription markets?

    • Somehow, I strongly doubt it.

      On a different, but related point subscription markets are very like repertoire if you combine product/service categories, e.g. rather than mortgages, consider the “all banking” category, then buyers have broader repertoires, there is low sole-brand loyalty.

      • Hi Byron

        Have you done any specific work on the opticians market? seems like a classic case of people thinking it’s a subscription market when in fact it’s a repertoire market (in that people are very happy to look around and loyalty is due to inertia rather than any great warmth to a brand)

      • I know of none specifically.

        I once argued that doctors and hairdressers might be more like subscription markets than repertoire. In that people tend to settle on one for many visits until the switch when the original doctor/hairdresser falls completely out of the repertoire.

        Opticians, because they keep the eyesight prescription on hand, might be the same. Certainly this would be the reason not great affinity to the brand.

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