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Effect of repeat purchase and dynamic market size on diffusion of an innovative technological consumer product in a segmented market

    Sugandha Aggarwal Affiliation
    ; Anshu Gupta Affiliation
    ; Kannan Govindan Affiliation
    ; P. C. Jha Affiliation
    ; Ieva Meidutė Affiliation

Abstract

This study develops diffusion models for technological consumer products under the marketing environment when a product is marketed in a segmented market and observes two distinctive promotional strategies of mass and differentiated promotion; an under explored study area. Mass promotion strategy creates a spectrum effect in market with an aim to create wider product awareness and influence the market size. Whereas the differentiated promotion strategy plays major role in external influence component in the respective segment and target for adoption by the current potential segment. Previous studies on segmented diffusion models assumed only first time purchase and constant market size which may yield underestimated results and fail to give appropriate insight of the diffusion process. The study develops and validates generalized diffusion models for segmented market incorporating the repurchase behaviour of the adopter population and dynamic potential market size considerations. Performance of the proposed models is analysed on real life data for a new product marketed in four segments and compared with the previous study.

Keyword : adoption growth, product life cycle, repeat purchase, dynamic market size, promotion strategy, spectrum effect

How to Cite
Aggarwal, S., Gupta, A., Govindan, K., Jha, P. C., & Meidutė, I. (2014). Effect of repeat purchase and dynamic market size on diffusion of an innovative technological consumer product in a segmented market. Technological and Economic Development of Economy, 20(1), 97-115. https://doi.org/10.3846/20294913.2014.885914
Published in Issue
Mar 26, 2014
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This work is licensed under a Creative Commons Attribution 4.0 International License.