Estimating the Market Potential with Pre-Release Buzz

Lancaster University Management School, Management Science Paper Series, No. 2019:1

39 Pages Posted: 14 Feb 2019

See all articles by Oliver Schaer

Oliver Schaer

Lancaster University Management School

Nikolaos Kourentzes

Lancaster University

Robert Fildes

Lancaster University - Management School

Date Written: February 3, 2019

Abstract

With increased competition and shorter product life-cycles, forecasting the life-cycle sales of new products prior to launch is becoming increasingly important to marketers and demand planners. Our study contributes to the literature on new product adoption using analogies by augmenting information from previous generations with pre-release search traffic. In contrast to existing research, which relies on pre-release buzz information only for the launch phase, we consider life-cycle sales. First, we propose a model of pre-release buzz and market potential, establishing the connection between the two. Then, we validate this relationship with an empirical experiment on sequential video game sales. Our finding support that pre-release buzz contains predictive information up to 17 weeks prior to release and can increase life-cycle sales forecast accuracy up to 20%. The explanatory power of pre-release buzz varies across product generations. This evolution opens up marketing opportunities and highlights why it is important to manage pre-release buzz.

Keywords: Google Trends, Diffusion, Analogy, Pre-Launch, New Product

Suggested Citation

Schaer, Oliver and Kourentzes, Nikolaos and Fildes, Robert, Estimating the Market Potential with Pre-Release Buzz (February 3, 2019). Lancaster University Management School, Management Science Paper Series, No. 2019:1 . Available at SSRN: https://ssrn.com/abstract=3325878 or http://dx.doi.org/10.2139/ssrn.3325878

Oliver Schaer (Contact Author)

Lancaster University Management School

Management Science Department
Lancaster University Management School
Bailrigg Lancaster, LA1 4YX
United Kingdom

Nikolaos Kourentzes

Lancaster University

Lancaster LA1 4YX
United Kingdom

Robert Fildes

Lancaster University - Management School ( email )

Department of Management Science
Lancaster LA1 4YX
United Kingdom
(44) 1524 - 593879 (Phone)

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