Modelling innovation and imitation sales of products with multiple technological generations

Abstract Majority of consumer durables have multiple technological generations. Each succeeding generation offers some innovative performance enhancements, feature additions etc. distinguishing itself from the past releases. Therefore the consumer's attitude towards each of them can be very different. There is a need to understand consumer psychology and have accurate measure to predict the adoption process of new technology. Mathematical models have proved to be ideal tools to explain the past purchasing-behavior and also for forecasting. This paper focuses on studying the relative changes of diffusion parameters for both first time purchasers and upgraders along with developing a more general sales model for multiple technology generation products. The proposed model explicitly identifies different groups of purchaser viz. first timers and repeaters (upgraders).

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