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.
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.