A Market Dynamics Model for New Industrial Products and Its Application

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected].. INFORMS is collaborating with JSTOR to digitize, preserve and extend access to Marketing Science. New product planning models attempt to predict the market consequences of product line and product design decisions. One output of such models, especially those driven by subjective or market research data, is usually theoretical market shares based upon consumer preferences under idealized conditions. This paper describes a class of models that bridge the gap between such theoretical market shares and dynamic sales forecasts. This model accounts for differences in customer awareness of different products, for differences in product announcement dates, for differences in product availability, for differences in marketing efforts, for customer inertia and for customer purchasing delays. The paper describes specific details of such a model used in a system developed for market analysis of high speed nonimpact computer printers.