Why Modeling Averages Is not Good Enough: A Critique of the Law of Double Jeopardy
Martin Bongers and Jan Hofmeyr
According to the law of double jeopardy (DJ) in markets, big brands benefit doubly: They have more users, and their users use them more. More formally: “In all markets, all conventionally used brand performance measures (BPMs) can be predicted from market share using the Dirichlet distribution (once calibrated)” (Chatfield and Goodhardt, 1975).
The law challenges many marketing-research approaches. Consider brand equity. Most attitudinal systems are based on some sort of commitment or engagement ”ladder” (Keller...