A Multiattribute Model of the Timing of Buyer's Upgrading to Improved Versions of High Technology Products

Stanford University GSB Research Paper No. 1720(R)

38 Pages Posted: 5 Jan 2004

See all articles by Sang-Hoon Kim

Sang-Hoon Kim

Seoul National University - College of Business Administration

V. Seenu Srinivasan

Stanford University - Graduate School of Business

Date Written: September 2003

Abstract

This paper presents an approach to forecast the sales path of an improved version of a high technology product defined in terms of its price and multiattribute product specification. The approach is potentially useful to managers to answer what-if questions regarding the profitability (e.g., net present value) of alternative price and product specifications of the upgrade. The proposed approach integrates an individual-level multiattribute utility model with a hazard function specification. An illustrative application to the personal digital assistant (PDA) category confirms the validity and potential of the proposed approach. In particular, higher upgrade costs and expectation of faster product improvement tend to delay buyers' upgrades.

Suggested Citation

Kim, Sang-Hoon and Srinivasan, V. Seenu, A Multiattribute Model of the Timing of Buyer's Upgrading to Improved Versions of High Technology Products (September 2003). Stanford University GSB Research Paper No. 1720(R), Available at SSRN: https://ssrn.com/abstract=465621 or http://dx.doi.org/10.2139/ssrn.465621

Sang-Hoon Kim

Seoul National University - College of Business Administration ( email )

San 56-1, Sillim-Dong
Kwanak-Gu
Seoul, 151-742
Korea

V. Seenu Srinivasan (Contact Author)

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-8505 (Phone)
650-725-6152 (Fax)

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