A novel Bass-type model for product life cycle quantification using aggregate market data

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Abstract

Product LifeCycle(PLC)isawidelyacceptedconceptthathasbeengivensignificant attentionin operations managementandmarketingliterature.However,itsquantification remainsamajor challenge. ThisstudyaimstodevelopauniqueandoriginalanalyticalmodelforquantifyingPLCsusing aggregatemarketdata.TheBassdiffusionmodelisusedtoforecastconsumers' first purchasesofthe product. Next,theNovelty–LoyaltyBasedConsumerUtility(NLBCU)theory,whichhasaconfirmed neuropsychologicalbasis,isusedtomodelrepeat(orreplacement)purchases.Theuniquecontribution of thisworkisthatitsynthesizestheprevailinginnovationdiffusiontheoryandtheNLBCUtheoryto provideadistinct,dynamicandendogenousperspectiveonconsumerpurchasingbehavioracrossthe entire PLC.Themodel'sadvantagesincludeitssimplemathematicalformulation,itsminimaluseofdata and itsharmonywiththepredominatingideasoftheinnovationdiffusionliterature.Throughsimulation studies andempiricalinvestigations,thedescriptivepoweranddata-fitting performanceofthemodel are demonstrated.
Original languageEnglish
Pages (from-to)208-216
JournalInternational Journal of Production Economics
Volume158
DOIs
Publication statusPublished - 2014

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Keywords

  • word-of-mouth
  • novelty seeking
  • consumer durables
  • personality-trait
  • diffusion-models
  • packaged goods
  • repeat model
  • long-term
  • behavior
  • growth

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