I was recently asked for a causal explanation of marketing’s Double Jeopardy pattern.
This is discussed in How Brands Grow (e.g. table 3.3 and surrounding text). Also see page 113 of my textbook. Though the most complete explanation is in the forthcoming “How Brands Grow part 2”.
It’s worth noting that causal explanations turn out to be ‘in the eye of the beholder’… e.g. what caused that window to break?
… the speed and mass of the ball resulting in sufficient force to break the molecular bonds in the glass of that window
… Jonny playing baseball on the front lawn when his Mum told him not to
… the wind, the pitch, the sun in Jonny’s eyes
… the Smith’s skimping and not installing double glazing ignoring their builder’s advice
All are better or worse explanations, depending on your point of view.
It’s the same for Double Jeopardy.
One explanation is simply that it’s a scientific law, it describes a bit of the universe, and that’s it… it’s simply how the world is. We don’t tend to ask why is there an opposite and equal reaction for every action (Newton’s first law), there just is.
The statistical explanation of Double Jeopardy is that it is a selection effect. Because brand share depends largely on mental and physical availability, rather than differentiated appeals of different brands. For marketers this is pretty important, pretty insightful, we wouldn’t get Double Jeopardy if brands were highly differentiated appealing to different segments of the market. Since we do see Double Jeopardy all over the place that suggests that real-world differentiation is pretty mild. Mental and physical availability must be a much bigger story than differentiation. That’s a very important insight.
Marketing Science 
Hi Byron. Maybe one way to look at causality here is through algebra. Say you just have two brands, one with 90% and another with 10% of market share (for concreteness, two supermarket chains). Assume everyone goes once a week to buy groceries by picking a brand randomly in proportion to its market share (I say randomly because this ensures elimination of any confounders and renders the causal effect on loyalty entirely dependent on the difference in market share). After two weeks, under such a random model, you will get 81% of purchases made only in the major brand, 1% made only in the minor brand, and 18% made in both. Therefore, for the population who buys the major brand, the loyalty metrics is 81/(81+18), which is larger than 1/(1+18), which is the loyalty metrics for the minor brand. It’s not hard to see that the general solution for this model is L(p)=p^2/(p^2+2p), where L(p) is the loyalty metric for a brand of market share p. Since L(p) is an increasing function of p and L(p)=L(1-p) happens only for p=0.5 (both facts can be checked by taking derivatives and doing simple algebra), then we conclude that in this model a brand with more than 50% of market share will *always* have larger loyalty, i,.e., L(p)>L(1-p) for any p>0.5. I don’t know the literature on double jeopardy, so happy to hear your advice or pointers here if people have looked the problem from this perspective.
Dear Byron,
I’ve recently read your book and really astonished how great it is (and how inproportionally popular it is). I guess for the first time in my 10 years marketing career I see so simple and coherent explanation of how branding works. And (what’s important) extremely well linked to developments in psychology (like Kahneman’s System 1 & 2). JD law is really one of few actual law in marketing that has sound psychological explanation. And now see it in my own data. But the business question that raises for me relates to new products. When you launch new product in the market you surely have JD law that works against you. So you need to create salience for the new launch. In your opinion is there some tipping point that new launches need to reach to get JD law start working in their favor?
DJ simply says what big and small brands are. Yes life is tough for a new brand, it has to work to gain some mental and physical availability. But there us no law working against it. Certainly nothing due to psychology. But there are thresholds it has to reach in distribution for synergy effects.
Double Jeopardy law simply says what is. It doesn’t work against or for any brand. It says what a small brand is, it doesn’t say it is weak or doomed (nor destined for greatness) – it says if you are small then you will have very low penetration and slightly lower loyalty metrics than larger brands.