Hauser, J. (2005). Note on Life Cycle Diffusion Models. MIT Sloan Management. Faheem, H. (June 2009). Apple Inc's iPhone: Can iPhone Maintain its Initial Momentum? Center for Management Research, Reference #: 508-117-1. Scherf, K. Cai, M. and Barrett, J. (2007). iPhone: A Consumer Perspective. A Parks Associates White Paper (http://www.parksassociates.com) FROM THE OUTLINE
Up to now innovators and early adopters have driven market penetration. The firm must now shift its strategy to satisfying the needs of niche market users with differentiated products, still trying to maintain value pricing. The rank order of firms changes and usually there are few firms with large shares, many with low shares. Buying patterns are unstable due to high switching among competing brands and developing price sensitivity. Basic technology remains unchanged and product improvements and line extensions are introduced to protect existing consumer franchises as more competitors enter the market. At this point a company is either a leader/pioneer or follower/challenger, each with its own unique set of strategies. Sales projections of products launched during the early or growth phases of product life cycles are often unrealistically over optimistic due to the lack of market data and the enthusiasm of the launching company. Even after the initial months when sales may be showing signs of meeting or even exceeding first year projections, they can quickly fall as a result of faulty marketing strategy / execution, products not meeting customer expectations, or competitors’ retaliatory actions. Often marketers will estimate a "reference projection" of potential sales based on adoption and diffusion models for innovative new product introductions. One such model in popular use is the Bass Diffusion Model. Your reading for this week discusses the Bass model. While not normally referenced, of interest is a description of the model from Wikipedia that refers to extensions...
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