Investigates the purchasing of brands across different price tiers. The purpose was to determine if buying across price tiers followed the same pattern widely found in brand purchasing, known as the Duplication of Purchase Law.
Uses a consumer survey methodology, using bottled wine as an example category. It provides evidence that while buyers exhibit repeat‐purchase loyalty to price tiers, they also buy from a repertoire of different price tiers.
Finds that sharing of purchases with other price tiers does approximate the Duplication of Purchase Law. That is, a price tier shares customers with other price tiers approximately in line with the overall popularity of those other price tiers. This suggests that competition between price tiers is largely predictable, and based on the prevalence of purchases at each tier. However, there is also consistent “partitioning” where adjacent price tiers share customers to a greater extent than would be expected under the Duplication of Purchase Law.
This research is valuable to both marketers and researchers, as it provides a quantifiable context and structure to those examining competition from a pricing perspective. It provides insights into where new brands should be launched and potential cannibalization effects. Finally, the presence of a price repertoire suggests that researchers should be wary of categorizing buyers to specific segments based on single answers to questions about “last” or “typical” price paid for purchases. Several fruitful areas for further research also emerge from this study, in particular the examination of what price levels or tiers actually constitute break‐points in markets, whereby brands residing in one tier are recognized as markedly different to those in other tiers.
