Long Term Sales Forecasts of Innovations - An Empirical Study of the Consumer Electronic Market

Abstract

This paper empirically examines models of replacement sales for six electronic consumer durables - TVs, VCRs, DVD players, Digital Cameras, personal and notebook computers - using data from a large survey of 8077 German households. A new replacement model is developed that fits the empirical "lifetables" better than existing models. This said, fitting to replacement sales data was not substantially improved as these fits are not particularly sensitive to mis-specification of the shape of the underlying distribution. Since many product innovations can be targeted at replacement rather than first purchase buyers - this improved understanding of replacement behaviour helps entrepreneurs identify new opportunities.

Keywords: Consumer Durables, Marketing, Product Innovation, Maria Kaya, Paul Steffens