Faculty of Business Seminar Series / Barış Depecik

Title : Who Benefits from Brand Exits? Why?

Abstract : The increasing frequency of brand exits raises two questions pertinent for both manufacturers and retailers: When a brand disappears from the market, (i) what brands are better positioned to benefit from the exit? and (ii) what marketing efforts influence the realignment of sales after the exit?  To answer these questions, we develop a dynamic brand sales response model. The model allows for examination of the long-term effects of a brand exit on sales and identification of the drivers of excess demand redistribution following the exit.  We apply the model to brand exit events across four multiple repeat-purchase product categories. The results indicate that the market shares of a deleted and an incumbent brand, post-exit promotion strategies, and the incumbent brand’s similarity to the deleted brand explain variations in sales response to exits across brands. We examine the effect of similarity on multiple dimensions and reveal what underlying product attributes are most critical in attracting consumers of the deleted brand. Our results generate insights that will help firms better manage their product portfolios and marketing investments to maximize their share of the freed up demand.

Place : AB2- Meeting Room 345