How brand loyal shoppers respond to three different brand discontinuation scenarios

Denisa Hebblethwaite, Andrew G. Parsons, Mark T. Spence

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    Purpose – Retailers may respond to a manufacturer discontinuing a brand or product range in three ways: not offering an alternative, thus reducing the assortment size; replacing it with a substitute; or introducing a rebranded product by the same manufacturer, if such an option is available. Herein we study all three scenarios and assess the extent to which total category sales are affected; how these discontinuations affect alternative offerings within the product category; and whether usage levels moderate within category switching behaviour. Shoppers did not have the option of switching stores to acquire the discontinued brand – their preferred brand/product range ceased to exist.

    Design/methodology/approach – All three studies are quasi-experiments using scanner panel data. The product discontinuations examined are real events that took place within the major supermarket chain in New Zealand.

    Findings – In all three scenarios average category sales decreased for the three-month period following the discontinuation. In Study 1 where a preferred brand of milk was discontinued with no replacement overall category sales decreased but competing brands gained sales; introducing a replacement corn chip range (Study 2) successfully captured the spend on the discontinued range, but other brands lost sales; and rebranding a cereal (Study 3) decreased both brand sales and category sales. With the exception of Study 1, near substitute product offerings did not capture a greater proportion of the spend from the discontinued brand compared to less similar substitutes. Expectations were that heavy users would have a greater propensity to shift to near alternatives than would medium/light users, however, none of the studies lend support.

    Originality/value - This is the first research effort to use scanner panel data to explore the reactions by brand loyal customers to three different brand discontinuation scenarios initiated by the manufacturer.
    Original languageEnglish
    Pages (from-to)1918-1937
    Number of pages20
    JournalEuropean Journal of Marketing
    Issue number11/12
    Publication statusPublished - 14 Nov 2017


    • brand discontinuation
    • rebranding
    • shopper response
    • switching behaviour
    • scanner panel data
    • quasi-experiment


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