 Market effects of new product introduction: Evidence from the brew‐at‐home coffee marketPhilip Gayle () and Ying Lin Journal of Economics & Management Strategy, 2022, vol. 31, issue 3, 525-557 Abstract: The introduction of new products has always been an important source of economic development and improvement in consumer welfare. With retail coffee data spanning 5 years after the single‐cup brew coffee pods were introduced to grocery chains, this paper empirically studies the market effects of new product introduction in the brew‐at‐home coffee market. We use a structural model of demand and supply to capture the changes in consumers’ preference for this new product over time. The demand estimates suggest that consumers’ relative preference and willingness‐to‐pay for the new product grew substantially over the sample periods. The analysis reveals the extent to which the introduction and growing presence of the new product simultaneously expanded the relevant market and cannibalized the sales of pre‐existing substitute products (traditional auto‐drip brew coffee products). Furthermore, we quantify the annually expanding welfare gains of the average consumer attributable to the new product. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:31:y:2022:i:3:p:525-557 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in Journal of Economics & Management Strategy from Wiley Blackwell |
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