Law of Market Dominance

If consumers were to buy a product with equally likely probability, it can be shown using axioms of probability that a company can achieve market dominance or increase its market share by simply introducing many new alternate-brands. With each product launch, the company will continue to gain new market share but each gain comes at a diminishing rate.Also, an absolute dominance of 100% market share is not possible because at least one competitor exists. A formula to determine the optimal number of launch, after accounting for cost of a product launch, was given and it is clear that the marginal market share gained from each launch is significantly higher for market with many competitors.Although the equally probability condition seems unrealistic, the law of market dominance may be applied to products that consumers require low prior knowledge or that consumers are overwhelmed by information and end up resorting to random choice. Unless researcher can provide persuasive evidence that consumer buy a certain product with bias probability, the law of market dominance suggests it is advantageous for the company to launch new brands in order to gain additional market share than to spend thousands on advertising hoping to convince consumers to buy its product.