Andrew S. C. Ehrenberg - Buyer Behaviour

Buyer Behaviour

In 1955, Ehrenberg moved into marketing research working on consumer panels. His first milestone paper was "The Pattern of Consumer Purchases" which showed the applicability of the Negative Binomial Distribution to the numbers of purchases of a brand of consumer goods.

In the early 1980s, with Gerald Goodhardt and Chris Chatfield, he extended the NBD model to account for brand choices. The generalisation to the multi-brand case was put forward in "The Dirichlet: A Comprehensive Model of Buying behaviour" and was read to the Royal Statistical Society. Finally published in 1984 the NBD-Dirichlet model of brand choice successfully modeled the repeated category and brand purchases within a wide variety of markets. 'The Dirichlet', as it became known, accounts for a number of empirical generalisations, including Double Jeopardy, the Duplication of Purchase law, and Natural Monopoly. It has been shown to hold over different product categories, countries, time, and for both subscription and repertoire repeat-purchase markets. It has been described as one of the most famous empirical generalisations in marketing, along with the Bass model of diffusion of innovation. His work in this field was summarised in the book "Repeat Buying".

Ehrenberg derived from these models of buyer behaviour a view on advertising for established brands. It mostly serves to publicise the advertised brand, but seldom seems to persuade.

Promotions have only a short-term effect, and do not affect a brand's subsequent sales or brand loyalty. The extra buyers during the promotion have been seen almost all to have bought it before the promotion rather than being the hoped for new buyers.