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The Dirichlet Model

This measures repeat buying and makes some simple assumptions eg that consumers tend to have split loyalties to each of several brands. The application of this model is associated closely with the work of Professor A S C Ehrenberg from South Bank University London.

Predicts future sales performance
Analyses degree of cannibalisation of line extensions & possible success factors for new brands
Analyses loyalty programmes
Penetration of category
Average frequency of buying category
Average number of brands bought
Market share
Focuses on quantitative predictions
Does not explain psychological reasons for customer loyalty

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