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Teaching notes · lesson 2 · a 20-minute class

Penetration and double jeopardy

Big brands have more buyers, who are also a little more loyal. Tracks: Strategy, Media.

Open the lesson

Learning goalsBy the end, students can

  • Define penetration and purchase frequency, and state the double jeopardy pattern.
  • Explain why share growth comes mostly from more buyers rather than heavier buying.
  • Judge whether a growth plan matches the evidence on how brands grow.

The 20-minute classMinute by minute, with the lab on the projector

  1. 0:003 min, to 3:00

    Cold open

    Ask: who bought a soft drink this week? Who bought the same brand every time? Count hands. Most buyers of any brand are light buyers.

  2. 3:004 min, to 7:00

    The idea

    Define penetration and frequency. State double jeopardy: small brands have fewer buyers who buy them slightly less often.

  3. 7:005 min, to 12:00

    Lab on the projector

    Slide share from low to high. Read penetration and purchases per buyer out loud at three points. Ask what moved most.

  4. 12:003 min, to 15:00

    Pairs

    Pairs write a one-line growth plan for a small brand that fits the curve.

  5. 15:003 min, to 18:00

    Discussion

    Take the loyalty scheme question. Ask who the scheme's money goes to.

  6. 18:002 min, to 20:00

    Check

    Three lesson questions. Ask for one plan that would fail the evidence, and why.

Discussion questionsWith what a strong answer covers

  1. A challenger proposes a loyalty card for its best customers to double their buying. What would you ask?

    A strong answer covers
    • Most of the money goes to heavy buyers who already buy.
    • Frequency barely moves with size, so the upside is small.
    • Suggests reaching more category buyers, including light ones.

  2. Why do analysts and boards read penetration gains as durable?

    A strong answer covers
    • More people buy the brand, so memory is refreshed in more heads.
    • Less reliance on a few heavy buyers.
    • Loyalty tends to follow size, so it rises after penetration.

  3. If a big brand's buyers are slightly more loyal, does that mean loyalty causes size?

    A strong answer covers
    • The pattern runs mostly the other way: size brings slightly higher loyalty.
    • Separates correlation from cause.
    • Links back to the Dirichlet curve in the lab.

The lab as homeworkAbout 15 minutes for a student

Use the lab to see where a brand's growth comes from as its share doubles.

  1. Set share to 10% and note penetration and purchases per buyer.
  2. Set share to 20% and note both again.
  3. Work out how much each one changed.

They answer: When share doubles from 10% to 20%, how much do penetration and purchases per buyer each change, and what does that say about how to grow?

A strong answer covers
  • Quotes both readings from the lab.
  • Shows penetration rises far more than purchases per buyer.
  • Concludes growth plans should aim at more buyers, not heavier buying.

Students also answer the lesson's three questions. Their score is worked out on the server from their answers.

Set this lab as homework

Students open a link, do the lab, answer the three questions and write what they found. You see each student's quiz score and finding on your class page.

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