Modeling commercial processes and customer behaviors to estimate the diffusion rate of new products

Abstract

This paper presents a generic mathematical model for depicting the diffusion of an innovative product on a given market. Our approach relies on a probabilistic modeling of each customer behavior with respect to the commercial process which is used to promote such a product. We introduce in particular the concept of coherent market that corresponds to a market which can be analyzed in a uniform way within our model. This last notion allows us to recover the classical empirical results that were discovered and widely studied by E.M. Rogers and his school (Rogers 1995). We explain finally how to use our approach as a support for analytic predictive marketing.

Advance Selling in the Presence of Product Diffusion Effect and Strategic Consumers

“…For example, in the case of new product diffusion, Moe [22] model the diffusion of new products concerning presale periods. Alain [4] constructs a generic mathematical model of the diffusion of an innovative product in a given market, which is used to analyze and forecast product demand. Gu [9] finds macroscopic patterns of new product diffusion by modeling consumer interaction behaviour during product diffusion and exploring the influence of factors such as product utility parameters and group communication on macroscopic diffusion outcomes.…”