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Forecasting the price evolution of new electronic products
Author(s) -
Dino Richard N.
Publication year - 1985
Publication title -
journal of forecasting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.543
H-Index - 59
eISSN - 1099-131X
pISSN - 0277-6693
DOI - 10.1002/for.3980040109
Subject(s) - product lifecycle , product (mathematics) , economics , maturity (psychological) , econometrics , new product development , monochrome , product category , computer science , mathematics , psychology , developmental psychology , geometry , management , artificial intelligence
This study tests the hypothesis that prices in new markets change in a pattern similar to and related to the product life cycle. Three stages of price decline have been identified in electronic product markets and can be associated with the introduction, take‐off and growth, and maturity stages of the product life cycle. The study integrates the methodologies of the product life cycle concept and experience curve theory and analyses price and product behaviour for radios, monochrome (black and white) televisions, colour televisions and video cassette recorders. The empirical evidence supports the hypothesis and suggests, as a general rule, that a better understanding of a product's life cycle and the factors that affect it can aid in the development of price forecasts. In fact, the marriage of experience curve theory and the product life cycle concept provides a methodology for quantifying the impact of influential factors and gives the analyst the ability to bound the uncertainty around price forecasts, ultimately leading to better strategic decisions, today, for tomorrow's markets.