In one line
Penetration is the share of people (in Countermove, adults in the market) who buy your brand at least once in a period. Double jeopardy is the pattern that small brands have fewer buyers, and those buyers buy them slightly less often.
What it does
- Shoppers buy a category several times a quarter and spread those purchases across brands. Each buyer has their own odds of picking you.
- The Dirichlet model turns a brand's share of purchases into how many people buy it at least once. A small brand gains share mostly by adding buyers.
- Purchase frequency barely moves with size, so the gap between brands is mostly in how many people buy.
Business and brand
Impact on the businessP&L, cash, share price
- Growth plans built on more buyers are more credible than plans built on selling more to the same few.
- Loyalty schemes aimed at heavy buyers tend to subsidise sales you would have had anyway.
- Analysts and boards read penetration gains as durable growth.
Impact on the brandMemory, loyalty, pricing power
- Light and occasional buyers are most of your buyers: brand reach has to find them.
- Loyalty follows size: it rises after penetration does.
- A brand that loses buyers loses memory structures in people's heads too.
Try it
Grow the brand's share
Slide your share of category purchases. The curve uses the engine's own Dirichlet maths to show penetration and how often each buyer buys you.
- Halvard Cola: 63% share, 90% reach, 4.2× each
- Brisa: 20% share, 44% reach, 2.7× each
- Brightwater: 17% share, 38% reach, 2.6× each
Penetration44%of category buyers, per quarter
Purchases per buyer2.73of 6 category purchases
Notice: At 20% of purchases, 44% of category buyers buy the brand in a quarter, 2.7 times each. Halve the share and penetration falls to 24%, but each buyer still buys 2.5 times: the gap is mostly buyers.
Runs Countermove's market engine: the reference soft-drinks market, three brands, rivals holding their plans so only your change moves the result.
Sources
- Ehrenberg, Goodhardt & Barwise (1990), Journal of Marketing: double jeopardy revisited
- Goodhardt, Ehrenberg & Chatfield (1984), Journal of the Royal Statistical Society A: the Dirichlet model
- Sharp (2010), How Brands Grow, Oxford University Press