In a study of the Double Jeopardy (DJ) phenomenon and the mediating
effect of brand penetration between advertising and brand loyalty, we
integrate a survey of 19,335 consumers on their buying behavior of 187
brands across two fast moving consumer goods categories, shampoo and
detergent, and a database of advertising expenditures on these brands in
four major cities in China. We find that (1) smaller brands are punished
twice for being small, following the well-known DJ pattern, which says
that brands with larger market penetration tend to enjoy higher repeated
purchases and smaller brands attract fewer buyers who also buy less; (2)
brand penetration plays a mediating role in the relationship between
advertising and brand loyalty; and (3) there is an asymmetric effect of
market penetration on brand loyalty for small and big brands.