Dj. Reibstein et Pw. Farris, MARKET SHARE AND DISTRIBUTION - A GENERALIZATION, A SPECULATION, AND SOME IMPLICATIONS, Marketing science, 14(3), 1995, pp. 190-202
In this paper we review evidence of a generalized convex cross-section
al relationship between retail distribution and unit market share, i.e
., large-share brands have more share points per percentage of distrib
ution than small-share brands. The dynamics and structure of distribut
ion and share can help explain many phenomena in marketing, including
this convex shape: (1) market share is both a cause and an effect of d
istribution, and (2) in the typical convenience goods distribution sys
tem there are a few large outlets that stock many brands and numerous
smaller outlets that stock the leading brands only. Generally, the obs
erved cross-sectional ''curve'' relating distribution and share will r
eflect the retailers' stocking decisions, not the incremental effect o
f distribution on share. However, a logically consistent model of shar
e based on (1) and (2),when combined with the assumption of low search
loyalty, results in customers being willing to switch from preferred
to available brands. A further consequence is that the marginal effect
of weighted distribution on share is likely to be increasing, i.e., r
esult in convex curves relating distribution and share for a given bra
nd. In some cases, and for some measures of distribution, these convex
curves have been observed in time-series data for brands that failed
and lost distribution over a relatively short period of time. The impl
ication is that marketers should monitor distribution carefully, as it
is the result of combined effects of brand preference, loyalty, and '
'push'' programs. With a better understanding of the market share/dist
ribution relationship, managers should be in a better position to fore
cast marketplace results for a given level of distribution.