Data is Free

Via Yglesias

Bronnenberg, Dhar and Dube report on first mover advantage in consumer packaged goods brands:

We document evidence of a persistent “early entry” advantage for brands in 34 consumer packaged goods industries across the 50 largest U.S. cities. Current market shares are higher in markets closest to a brand’s historic city of origin than in those farthest. For six industries, we know the order of entry among the top brands in each of the markets. We find an early entry effect on a brand’s current market share and perceived quality across U.S. cities. The magnitude of this effect typically drives the rank order of market shares and perceived quality levels across cities. [...] Across 49 current leading national CPG brands, dating back to the late 1800s and early 1900s, we find that the current share in markets close to the city of origin, is, on average, 12 share (i.e., percentage) points higher than the national average of 22 percent.

Tyler Cowen remarks:

What’s amazing is how long these effects — however they are motivated — last. Miller Beer was introduced to Chicago in 1856 (a very early launch though technically not its first city) and it still has an advantage there, relative to other cities. Heinz Ketchup originated in Pittsburgh in 1876 and it still has an market share advantage there, again relative to other cities.

I've seen similar research regarding Internet products. The same effect of geographic proximity = brand awareness = adoption. Except that the geographic proximity is related to concentration of the product's target market. So, products like Facebook start strong where the companies are located, but they quickly migrate to where their target audience lives. So, Facebook is strong on college campuses. Political blogs have strong share in DC, but then quickly get adopted in college towns.

What I haven't seen is an evaluation of this on a global scale.

Michael Fassnacht has a terrific article at AdAge describing the changing nature of customer segmentation. One of the big challenges when analyzing a market is understanding how certain customers will react to a product offering. Having written 12 significant business plans, for companies or projects that were funded, I can tell you that market forecasting is - at best - an inexact science. Even the best, most elaborate forecasts are usually just precisely imprecise - they are incorrect down to the last digit.

The good news is that companies, particularly consumer facing companies, do not have rely solely on traditional market research tactics for understanding their audience. More precisely, technology enables us to understand that consumers are often drifting in and out of "traditional" segments. It seems to me that the best market research shops don't just rely on pre-launch research. Instead, we'll increasingly see the line between research, advertising, and analytics blur to the point where every interaction, every touchpoint, between a company and its market can be analyzed so that shifts in behaviors and circumstances can be picked up very early in the cycle.

Ad Age is reporting that Tropicana sales dropped 20% after a rebranding.

Apparently taking away that delicious looking orange with the straw stuck into it was a bad idea. This is a good reminder that if it ain't broke don't fix it is a good idea. Though in this case I think the better take away is that food packaging succeeds when it makes the food look tasty and desirable.

From the "ice" dripping down a Coke can, to the tasty cheeseburger's in a McDonald's ad, to the fake food in a teriyaki shop's window, food advertisements work when they make people's mouths water. The Tropicana redesign looked like they were selling insurance.

One of the interesting discussions around my family's house was, "if the papers die, where are we going to get our crossword puzzles?"

Only people who do the crosswords understand the enormous feature that the daily crossword puzzle represents for the newspaper. With the app store that need can be fulfilled.

Though it says something that the NY Times most valuable employee is Wil Schortz.