Consumer packaged goods in France: National brands, regional chains, and local branding

Using data from 50 U.S. markets, Bronnenberg, Dhar, and Dube (2007) observe that geographic variation is the predominant source of variation in national brand market shares. The authors of this comment extend this surprising and previously undocumented result in several respects. First, they replicate this basic finding in France and find that it is robust to time and region aggregation and data duration. Second, because of regional variation in chain locations and the limited research on the relative effect of chains on market shares, they link chain effects to market shares in France. The authors find that (1) chain effects explain more variation in market share than either time or region effects and (2) the addition of chain effects attenuates region-specific effects. Thus, chain structure is both another source of regional variation in demand and an important consideration in its own right. Finally, by coupling brand-time effects with longer data, the authors note that brand-time effects are larger than brand-region effects in France. This result suggests the importance of long-term effects in marketing and the need to collect longer durations of data to explain variation in market shares.