Academic journal article Academy of Marketing Studies Journal

A Preliminary Study of Double Jeopardy in Selected Retailers

Academic journal article Academy of Marketing Studies Journal

A Preliminary Study of Double Jeopardy in Selected Retailers

Article excerpt

ABSTRACT

The authors investigate the "double jeopardy" (DJ) concept in the domain of retailing. The authors show that DJ is moderately evident within health clubs and medical clinics, but most likely does not exist within convenience store retailers. The authors attempt to test which of three alternative explanations for market share rankings is supported: (1) a familiarity effect, (2) an experience effect, or (3) a design effect. No evidence is found to support the design effect. However, either of the familiarity effect or the experience effect may be a viable explanation for market share (and DJ), depending on the type of retailer. For medical clinics, the familiarity effect may be the source, while for health clubs it may be the experience effect. The authors suggest two mitigating factors in the findings related to DJ across each of the retail types: (i) the strength of brand affiliation/names or (ii) the levels of inherent consumer involvement or effort.

INTRODUCTION

A company needs to focus at least a proportion of marketing efforts on the development, maintenance, or enhancement of customer loyalty (Dick & Basu 1994). This emphasis is important because a company with a large number of brand loyal buyers will be more secure in its markets and should have a higher market share than other firms without this vital customer asset (Raj, 1985; Robinson, 1979; Smith & Basu, 2002). Competitors are at a disadvantage when some firms have a larger number of brand loyal buyers than they have. The many advantages include: a greater response to advertising (Raj, 1982), larger purchase quantities per occasion (Tellis, 1988), and reduced marketing costs (Rosenberg & Czepial, 1983). The advantages garnered from loyalty are especially important since, as markets become more mature, increases in share become more expensive and improvements in the loyalty base might be a viable means of increasing and maintaining share (Gounaris & Stathakopoulos, 2004).

The fact that competitive markets oftentimes exhibit similar market structure characteristics (market share), which in turn was found to be correlated with the number of brand loyal buyers, was first noticed by McPhee (1963). This observance that brands with large market shares usually had the most brand loyal buyers (and vice versa) was termed "double jeopardy" (DJ) because it seemed unfair for smaller brands to suffer in both ways. Previous research related to DJ suggests its' applicability to a variety of consumer brands and setting. Additionally, some consumerspecific variables will exhibit a similar relationship with market share as consumer loyalty (Ehrenberg et al., 1990).

This study applies the aspects of DJ to the area of retailing, investigating convenience stores, health clubs, and medical clinics. The dynamic evolution of the 'quick-stop' shopping from small neighborhood grocery and service stations to today's multi-purpose convenience stores located in nearly every city block has transformed the way people all around the world shop for small repetitively purchased items. A continuing worldwide trend towards healthier lifestyles has spawned the boom in businesses providing gym and exercise services to maintain fitness, as well as to lose weight. Also, the healthcare industry has changed from an emphasis on family doctors to more versatile medical clinics over the past twenty years, altering the way most of us get medical treatment. Each type of retailer faces highly competitive environments in their markets and the establishment of a large and loyal customer base is vital for long-term survival. With estimates regarding the number of 'truly' brand loyal buyers for these and related consumer retailers hovering around 25% (Pleshko & Heiens, 1996, 1997), the presence or absence of the double jeopardy phenomenon in these retail segments might be critical to the retailers' decision making. It would be difficult for small-share firms to grow and show long term success with a strong DJ effect evident. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.