Forecasting Fluid Milk Package Type with a Multi-Generation New Product Diffusion Model
IEEE Transactions on Engineering Management 39(2): 169-175
7 Pages Posted: 28 Feb 2015
Date Written: 1992
New product forecasting often focuses only on the new product itself, neglecting the fact that older technologies remain on the market to provide competition. Multi-generation innovation diffusion models are available, but have only rarely been tested on actual data. Furthermore, although causal factors such as pricing have been incorporated into single-generation models, little has been done to include causal factors in multi-generation models. A recently introduced multi-generation model, developed for high-technology industries and tested on a thigh-tech product class, is used here to forecast use of three generations of packaging technology in the fluid milk market: glass, paperboard cartons, and plastic. Results show that the model can be successfully applied to industries not usually associated with high technology, and to specific markets, rather than across a whole product class. the model is extended by incorporating pricing, which brings about slight improvements in already good forecasts.
Keywords: new product diffusion models; milk packaging; pricing, parameter estimation
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