Predicting product life cycle patterns

Yair Orbach () and Gila Fruchter ()

Marketing Letters, 2014, vol. 25, issue 1, 37-52

Abstract: In this paper, we propose a new model of adoption and repurchase due to upgrades driven by the utility of technology products that keep improving. The model is able to predict product life cycle patterns that could not be explained previously. Such patterns were used to challenge diffusion theory validity. Mathematically, the model is described as a nonlinear discrete system that depends on a small set of parameters. We investigate the dynamic properties of the nonlinear system using numerical stability analysis. We find domains in the parameters space in which the equilibrium point and the periodical orbits are stable. The domains correspond to population heterogeneity, tendency to upgrade, and the influence of industry response on market dynamics. We also implement our model to fit actual data of two real-world product life cycles with many irregularities and benchmark the results of our model vs. well-known models. Copyright Springer Science+Business Media New York 2014

Keywords: Repeat purchase; Upgrade; Utility; Forecasting; PLC; Nonlinear dynamic systems; Cycles and chaos (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11002-013-9239-0

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