The effect of cumulative category and brand growth on competitive intensity.

The Duplication of Purchase Law states that brands share customers in line with their size, not their positioning. Expected customer sharing between any pair of brands can be benchmarked using the duplication matrix sharing-coefficient. D-values can be interpreted as a summary measure of competitive intensity, but research has yet to explain why they differ between categories and over time. In equilibrium markets, both category and brand penetrations increase cumulatively so there is every reason to expect that values might vary. To test this, we examine the effect of cumulative penetration growth in six consumer goods categories to find that the Duplication of Purchase Law holds even over five years. D-values are however dependent on category saturation and only stabilise once total buyer numbers peak. This is important because it shows how brand growth depends on not just increasing penetration, but also on high levels of switching from other brands' buyers.