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Distribution and Market Share

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  • Wilbur, Kenneth C.
  • Farris, Paul W.

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 percent 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.

Suggested Citation

  • Wilbur, Kenneth C. & Farris, Paul W., 2014. "Distribution and Market Share," Journal of Retailing, Elsevier, vol. 90(2), pages 154-167.
    • Handle: RePEc:eee:jouret:v:90:y:2014:i:2:p:154-167
    DOI: 10.1016/j.jretai.2013.08.003
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    References listed on IDEAS

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    Cited by:

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    3. Kumar, V. & Sunder, Sarang & Sharma, Amalesh, 2015. "Leveraging Distribution to Maximize Firm Performance in Emerging Markets," Journal of Retailing, Elsevier, vol. 91(4), pages 627-643.
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    7. Kim, Nayeong & Lee, Dongmin & Cho, Seonghwan & Moon, Junghoon, 2023. "The effect of exclusive distribution on the sales of ready-made meals in online retail," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
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    9. Ailawadi, Kusum L. & Farris, Paul W., 2017. "Managing Multi- and Omni-Channel Distribution: Metrics and Research Directions," Journal of Retailing, Elsevier, vol. 93(1), pages 120-135.
    10. Dawes, John, 2022. "Factors that influence manufacturer and store brand behavioral loyalty," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    11. Kirsten Victory & Magda Nenycz-Thiel & John Dawes & Arry Tanusondjaja & Armando Maria Corsi, 2021. "How common is new product failure and when does it vary?," Marketing Letters, Springer, vol. 32(1), pages 17-32, March.
    12. Guissoni, Leandro Angotti & Rodrigues, Jonny Mateus & Zambaldi, Felipe & Neves, Marcos Fava, 2021. "Distribution effectiveness through full- and self-service channels under economic fluctuations in an emerging market," Journal of Retailing, Elsevier, vol. 97(4), pages 545-560.
    13. Hirche, Martin & Farris, Paul W. & Greenacre, Luke & Quan, Yiran & Wei, Susan, 2021. "Predicting Under- and Overperforming SKUs within the Distribution–Market Share Relationship," Journal of Retailing, Elsevier, vol. 97(4), pages 697-714.
    14. Antonis A. Michis, 2023. "Retail distribution evaluation in brand-level sales response models," Journal of Marketing Analytics, Palgrave Macmillan, vol. 11(3), pages 366-378, September.
    15. Hirche, Martin & Greenacre, Luke & Nenycz-Thiel, Magda & Loose, Simone & Lockshin, Larry, 2021. "SKU performance and distribution: A large-scale analysis of the role of product characteristics with store scanner data," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).

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