Zipf's Law also applies to the brand preference of consumers and their spending habits.  Marketers have long known that it is better to be Number One than Number Two, but now you can attach a revenue consequence to that.

 

Mr. Jan Hofmeyr, an expert on consumer behavior, conducted a market research study in Australia.  He tested two product categories: toilet paper and instant coffee. According to his model, consumers who used four brands of toilet paper would have been expected to spend 53% of their toilet paper budget on the top choice, 27% on the second brand and 13% on the third. In this case, the consumers actually spent 50% on the top choice, 33% on the second and 9% on the third. 

 

Zipf's Law clearly demonstrates the relative benefits of moving up in the rankings.  A product that leaps from second to first in a category can really affect the bottom line.  By determining a brand's ranking, you can predict market share.The economy of the past two years, when some brands silenced their calls for action, gave aggressive brands the chance to move up in the rankings. As our economy rebounds, now is the time for our clients to invest their advertising dollars to build market share.