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Extent and Impact of Incubation Time in New Product Diffusion
Author(s) -
Kohli Rajeev,
Lehmann Donald R.,
Pae Jae
Publication year - 1999
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/1540-5885.1620134
Subject(s) - incubation , diffusion , econometrics , incubation period , bayesian probability , product (mathematics) , economics , statistics , mathematics , chemistry , thermodynamics , physics , biochemistry , geometry
This article examines the time between product development and market launch, and its relation to the subsequent diffusion of consumer durables. We find that this “incubation time” is long. Further, it is a useful predictor of the shape of the subsequent sales diffusion curve. Using the Bass model as a base, we find that the longer the incubation time, the lower the coefficient of innovation ( p ) and the longer the time to peak sales. Further, using the incubation time in a Bayesian forecasting model significantly improves forecasts early in the life cycle. © 1999 Elsevier Science Inc.