Market Structure Analysis Using Birth and Asymmetric Growth of Products Based on a Mechanism of the 80/20 Law : Why and How the 80/20 Law Emerges

Consumers, companies and products differ among markets and change according to time ；why does a universal structure ‐the 80/20 law‐ hold in any market and time, how does it emerge, and what is its meanings in marketing? This paper, after proving that the 80/20 law is universally observed in markets and time by consumer purchasing data, discusses its emerging mechanism and managerial meanings. First, a simulation model shows that the 80/20 law emerges only if a product occurs constantly and grows in process of time. Since birth and growth of products are natural in a market, the 80/20 law emerges inevitably and autonomously in any market. Next, this paper proposes market structure analysis method based on the mechanism of the law. While birth and growth of products are common to all markets, birth probability of a new product varies among markets, and a growth rate of existing products is asymmetric among products within a market (i.e. whether the growth rate of products increases or decreases according as products grow). By referring to the universal parameter, birth and asymmetric growth of products, companies compare directly any market and comprehend how products are born and grow in a market